Born in New
York in 1963 to a family of Russian immigrants, Paul Klebnikov
graduated from California University, Berkley and the London School
of Economics, completing his doctorate in 1991. Klebnikov started
working for Forbes Magazine in 1989. Promoted to senior editor,
Klebnikov was an expert on Russian and East European politics and
economics. His special field of interest was conducting
investigations into the origins of wealth of the so-called oligarchs
and their possible ties to the Russian mafia.

In 1996 he wrote an article in Forbes calling exiled Russian
businessman Boris Berezovsky the “Godfather of the Kremlin” and
suggesting that the tycoon — who made his fortune during Russia’s
controversial privatisation programme in the 1990s — might have been
implicated in the murder of a well-known TV anchorman and had links
with Chechen organized crime groups.

Berezovsky sued the magazine for defamation, after which Forbes
admitted in open court that the allegations were unfounded and
Berezovsky withdrew his suit. During the proceedings, however,
Klebnikov published an equally controversial book, Godfather of
the Kremlin: Boris Berezovsky and the Looting of Russia in which
he asserted that Berezovsky had also channelled hundreds of millions
of dollars out of Russia.

Abb.: Buchtitel

Klebnikov’s second book,
Conversation With a Barbarian, written in Russian and published
in 2003, was based on a series of interviews with Chechen separatist
leader Khozh Akhmed Nukhayev and dealt, among other subjects, with
organized crime in Russia’s ongoing war in Chechnya.

Paul Klebnikov became the editor-in-chief of the Russian edition of
Forbes in April 2004. In May, the magazine published a list
of the 100 wealthiest people in Russia, many of whom said they were
unhappy about the publication.

While in charge of the new Russian Forbes, Klebnikov was also
undertaking certain independent investigations that he did not speak
of, Russian online news service Gazeta.ru reported, citing the
source from Forbes.

On Friday night, July 9, 2004, Paul Klebnikov was shot several times
as he was leaving his office building in Moscow. He died while in an
ambulance en route to the hospital.

"Paul Klebnikov (3 June 1963 -
9 July 2004)
was an American journalist of Russian descent. Born in New
York, USA,
Klebnikov attended
Phillips Exeter Academy, graduated from
University of California, Berkeley in 1984 and
London School of Economics and joined Forbes
in 1989. He rose to the position of senior editor at the magazine,
specializing in Russian and Eastern European politics and economics,
before becoming the first editor of Forbes Russian edition when it
was launched in April 2004.

Abb.: Buchtitel

He wrote Godfather of the Kremlin
(September
2000), a biography of
Boris Berezovsky [Борис Березовский], a Russian tycoon. Berezovsky was openly
critical of Klebnikov's writings, particularly an article published
in Forbes in 1996 about his (alleged) criminal activities for which
he filed a libel suit. Forbes was forced to retract the allegations.
Berezovsky is wanted in Russia on fraud charges and was granted
political asylum in the UK.

Murder

Klebnikov was shot to death on a Moscow
street late at night on 9 July 2004,
allegedly by Chechen assailants.

The publisher of Forbes Russian edition has said that the murder
is "definitely linked to his professional activity". According to
Russia's radio Ekho-Moskvy, Klebnikov said that he had not received
specific threats after publishing a list of Russia's wealthiest
people, but rather suspect the murder may have stemmed from
Klebnikov's revelations of ties between Chechen warlords and the
exiled tycoon Berezovsky.

On
November 29,
2004
two main suspects (Kazbek Dukuzov and Valid Agayev) were arrested in Minsk
[Мінск],
Belarus [Беларусь], to where they allegedly fled from Russia. Both arrested
men are ethnically Chechen and are Russian citizens. They were being
held in Minsk
KGB jail and were handed over to Russians almost three months
later on
February 22,
2005.
The delay in extradition, the Belarus authorities say, was because
they were waiting for paperwork and necessary evidence from the
Russian side.

On
November 21,
2005,
according to the
press release from the Russian Prosecutor General , the
indictment has been sent by prosecutors to court. According to the
indictment, ethnic Chechens Kazbek Dukuzov, Magomed Dukuzov, Musa
Vakhayev, Magomed Edilsultanov and others were a criminal gang, and
they were involved in racketeering and murder-for-hire. Chechen
warlord Khozh-Akhmed Nukhayev, who was unhappy with the book
Khlebnikov published about him in 2003, "Conversations with a
Barbarian", allegedly hired that gang to murder Khlebnikov. A
paralegal from Moscow, Fail Sadretdinov, was co-indicted with them
because he allegedly paid the same gang to murder a Moscow
businessman Aleksei Pichugin. Kazbek Dukuzov, Vakhayev and
Sadretdinov have been arrested, other people indicted are still
wanted by the police.

Legacy

In 2005, to honor Klebnikov's commitment to scholarship and
research on Russia
and the former Soviet states, the
London School of Economics established the Paul Klebnikov Prize
for outstanding masters degree students in Russian and Post-Soviet
Studies. The inaugural prize was awarded to Joseph Wolpin on
November 1, 2005."

Putin, Yeltsin, Gorbachev and Brezhnev,
spotted in Moscow, March 2000.

Abb.: Boris Nikolayevich Yeltsin (Борис Николаевич Ельцин)

"Boris Nikolayevich Yeltsin (Russian: Борис Николаевич
Ельцин) (born February 1, 1931) was
President of Russia from
1991 to
1999.

Early Life

Boris Yeltsin was born to a peasant family in Butka village,
Talitsa district,
Sverdlovsk region [Свердло́вская
о́бласть]. His father, Nikolai Yeltsin, was convicted of
anti-Soviet agitation in 1934 and served in a gulag for three years.
After his release he remained unemployed for a while and then worked
in construction. His mother, Klavdiya Vasilyevna Yeltsina, worked as
a seamstress.

As a young boy Yeltsin lost two fingers from his left hand as the
result of an accident involving a hand grenade whilst he was camping
with his "young pioneer" unit.

Member of the
Communist Party of the Soviet Union (CPSU) [Коммунисти́ческая Па́ртия Сове́тского Сою́за
= КПСС] from 1961 to
July 1990,
he began working in the Communist administration in 1969.
In 1977
as party boss in Sverdlovsk, he ordered the destruction of the
Ipatiev House where the last
Tsar had been murdered. Appointed to the
Politburo [Политбюро] by
Mikhail Gorbachev [Михаи́л Серге́евич
Горбачёв], Yeltsin was also "Mayor" of Moscow [Москва́]
(First Secretary of the
CPSU Moscow City Committee) from
December 24,
1985 to
1987,
when he was sacked from both positions after criticizing Gorbachev
and the pace of reform in the USSR.

The brusque manner of his criticisms of Gorbachev during meetings
of the politburo violated a convention of procedure which mandated
that strong criticisms be circulated beforehand to avoid personal
clashes during actual meetings. Yeltsin was not exiled or imprisoned
as once would have been the consequence, but demoted to the position
of First Deputy Commissioner for the State Committee for
Construction. Yeltsin was perturbed and humiliated but plotted his
revenge. His opening came with Gorbachev's establishment of the
Congress of People's Deputies.

President of the RSFSR

In March
1989, Yeltsin was elected to the Congress of People's Deputies
and gained a seat on the
Supreme Soviet [Верховный Совет]. In May
1990,
he was appointed speaker of the Supreme Soviet of the
Russian Soviet Federated Socialist Republic (RSFSR). On
June
12, 1990, Congress of People's Deputies of the RSFSR adopted a
declaration of sovereignty and, in July, Yeltsin quit the CPSU.

On
June 12,
1991,
Yeltsin won 57 percent of the popular vote in democratic
presidential elections for the Russian republic, defeating
Gorbachev's preferred candidate,
Nikolai Ryzhkov [Николай Иванович Рыжков]. Yeltsin took office on July
10.

On
August 18,
1991, a
coup against Gorbachev was launched by hardline communists
headed by
Vladimir Kryuchkov [Владимир Александрович Крючков]. Gorbachev was held in the Crimea
[Крым]
while Yeltsin raced to the
White House of Russia in Moscow to defy the coup. The White
House was surrounded by the military but the troops defected in the
face of mass popular demonstrations, Yeltsin making a memorable
speech from the turret of a tank. By
August 21 most of the coup leaders had fled Moscow and Gorbachev
was "rescued" from the Crimea
and then returned to Moscow. Yeltsin was subsequently hailed by his
supporters around the world for rallying mass opposition to the coup.

Although restored to his position, Gorbachev's powers were now
fatally compromised. Neither union nor Russian power structures
heeded his commands as support had swung over to Yeltsin. Through
the fall of
1991, the Russian government took over the union government,
ministry by ministry. In
November 1991, Yeltsin issued a decree banning the Communist
Party throughout the RSFSR.

In early
December 1991,
Ukraine [Україна, Ukrayina] voted for independence from the Soviet Union. A week
later, on
December 8, Boris Yeltsin met with Ukrainian president
Leonid Kravchuk [Леонід Макарович Кравчук] and the leader of
Belarus [Беларусь],
Stanislau Shushkevich [Станісла́ў Станісла́вавіч Шушке́віч], in
Belovezhskaya Pushcha [Белавеская пушча] residence, where the three presidents
announced the dissolution of the USSR and that they would establish
a voluntary
Commonwealth of Independent States (CIS) [Содружество Независимых
Государств (СНГ)] in its place.

On
December 24, the Russian Federation took the Soviet Union's seat
in the
United Nations. The next day, President Gorbachev resigned and
the USSR ceased to exist (see
Collapse of the Soviet Union), thereby ending the world's
largest and most influential communist regime.

Post-Soviet Presidency

Following the dissolution of the USSR, the acceleration of
economic restructuring became one of Yeltsin's main priorities with
his government overseeing a massive privatization of state-run
enterprises. However, the Yeltsin government's incompetence and
destructive activities of pro-inflation forces caused the Russian
economy to further deteriorate.

Yeltsin's reform program took effect on
January 2,
1992 (see
Russian economic reform in the 1990s for background information).
Soon afterward prices
skyrocketed, government spending was slashed, and heavy new taxes
went into effect. A deep credit
crunch shut down many
industries and brought about a protracted depression. Certain
politicians began quickly to distance themselves from the program;
and increasingly the ensuing political confrontation between Yeltsin
on the one side, and the opposition to radical economic reform on
the other, became centered in the two branches of government.

Throughout 1992, opposition to Yeltsin's reform policies grew
stronger and more intractable among bureaucrats concerned about the
condition of Russian industry and among regional leaders who wanted
more independence from Moscow.
Russia's vice president,
Aleksandr Rutskoy [Александр Владимирович Руцкой], denounced the Yeltsin program as "economic
genocide." Leaders of oil-rich
republics such as
Tatarstan [Татарста́н] and
Bashkiria [Башкортостан] called for full independence from Russia.

Also throughout 1992, Yeltsin wrestled with the Supreme Soviet
and the Russian Congress of People's Deputies for control over
government and government policy. In 1992 the speaker of the Russian
Supreme Soviet,
Ruslan Khasbulatov [Руслан Имранович Хасбулатов], came out in opposition to the reforms,
despite claiming to support Yeltsin's overall goals.

Congress of People's Deputies attempted to impeach Yeltsin on
March 26,
1993.
Yeltsin's opponents gathered more than 600 votes for impeachment,
but fell 72 votes short.

On
September 21,
1993,
Yeltsin disbanded the Supreme Soviet and Congress of People's
Deputies by decree, which was illegal under the constitution. On
September 21 there was a military showdown, the
Russian constitutional crisis of 1993. With military help,
Yeltsin held control. The conflict that resulted in a number of
civilian casualties was resolved in Yeltsin's favor and elections
were held on
December 12,
1993.

In December 1994,
Yeltsin ordered the military invasion of
Chechnya [Нохчичьо] in an attempt to restore Moscow's control over the
separatist republic. Yeltsin later withdrew federal forces from
Chechnya under a 1996
peace agreement brokered by
Aleksandr Lebed [Алекса́ндр Ива́нович Ле́бедь], then Yeltsin's security chief. The deal allowed
Chechnya greater autonomy but not full independence (see
First Chechen War).

In July 1996,
Yeltsin was re-elected as President with financial support from
influential
business oligarchs. Despite only gaining 35 percent of the first
round vote, he successfully defeated his communist rival
Gennady Zyuganov [Генна́дий Андре́евич Зюга́нов] in the runoff election. Later that year,
Yeltsin underwent heart bypass surgery and remained in hospital for
months.

In 1998,
a political and economic crisis emerged when Yeltsin's government
defaulted on its debts, causing financial markets to panic and the
country's currency, the ruble, to collapse.

On
August 9,
1999
Yeltsin fired his Prime Minister,
Sergei Stepashin [Серге́й Вади́мович Степа́шин], and for the fourth time, fired his entire
cabinet.

During the 1999
Kosovo war, Yeltsin strongly opposed the NATO
military campaign against
Yugoslavia and warned of possible Russian intervention if NATO
deployed ground troops to Kosovo.

Yeltsin continued as President of Russia
until
December 31,
1999,
but the events of 1991
proved to be something of a high-water mark for him historically and
personally. He resigned on
December 31,
1999,
and in accordance with Russian Constitution, prime minister
Vladimir Putin [Влади́мир Влади́мирович Пу́тин] became an Acting President until new elections
were held on
March 26,
2000.

Life after resignation

Yeltsin's personal and health problems received a lot of
attention in the global press. As the years went on, he was seen as
an increasingly unstable leader, and not the inspiring figure he
once was. The possibility that he might die in office was often
discussed.

Yeltsin has remained very low-key since his resignation, making
almost no public statements or appearances. However, on
September 13,
2004,
following the
Beslan [Беслӕн] school hostage crisis, and nearly-concurrent terrorist
attacks in Moscow, Putin launched an initiative to replace the
election of regional governors with a system whereby they would be
directly appointed by the President and approved by regional
legislatures. Yeltsin, together with Mikhail Gorbachev, publicly
criticized Putin's plan as a step away from democracy in Russia and
a return to the centrally run political apparatus of the Soviet era.

In September 2005, Yeltsin underwent a hip operation in Moscow
after breaking his femur in a fall while vacationing on the Italian
island of
Sardinia."

Traditionally
an informal name for the heads of “power” ministries (i.e. the
Ministry of Defense, the Ministry of Interior Affairs, etc.) and
military or intelligence agencies, in recent years the word
siloviki (rooted in a Russian term for power) is more commonly
used to refer to a clan of former and present members of security or
military services, often the KGB (and its post-Soviet successor the
FSB), who came to power during the Yeltsin years and
had significantly increased their influence after Vladimir Putin
became President.

Promoters of a statist ideology, the siloviki, comprised of former
FSB and military officers, are seen by many Russian and
international commentators as the primary force behind some of the
apparent withdrawals from democracy during the Putin years,
including the curbing of independent media, the persecution of
businesses, and the violations during regional and federal elections
to government bodies. But if some consider the siloviki a threat to
fragile Russian democracy, others regard their influence as a
necessary counter-balance to Russia’s oligarchs.

International human rights groups have repeatedly voiced concern
over President Putin’s allegedly increasing reliance on the
security-intelligence apparatus to run Russia, resulting, in their
opinion, in serious setbacks for civil liberties and democratic
progress in Russia.

Among the developments attributed to siloviki’s influence are the
criminal case against Yukos Oil Company and the related
arrests of Yukos CEO Mikhail Khodorkovsky and core shareholder
Platon Lebedev; as well as a series of “spy trials”, whereby a
number of academics and environmentalists have been accused of
collaborating with Western intelligence agencies on the basis of
questionable evidence and procedures. The latter include the case of
Igor Sutyagin, a researcher from the U.S. and Canada Institute,
recently sentenced by a Moscow court to 15 years in hard labor for “espionage”,
and the case against physicist Valentin Danilov who was charged with
high treason in 2003 and whose acquittal by a jury has been
overturned by Russia’s Supreme Court.

Background

Before becoming Russia’s prime minister, President Vladimir Putin
served in the State Security Committee of the Soviet Union (KGB) for
15 years and later headed the Federal Security Service (FSB) and the
Security Council.

When Putin was elected President, the number of officials in Russian
government posts with connections to the former KGB and other
security agencies significantly increased. Some of these people also
belong to the so-called clan of “Petersburgers” or the “clan of
security people from St. Petersburg,” Vladimir Putin’s
native city.

While the security and military agencies providing the background
for the siloviki vary (for example, the current Prime Minister of
Russia Mikhail Fradkov once headed the Tax Police), the
foundation is provided by the FSB, the organization President Putin
himself used to belong to. The Russian newspaper Novaya Gazeta
once estimated the number of former intelligence officers currently
holding state office in Russia as being over 6.000 people.

In Power

Defense minister Sergey Ivanov studied with Putin at the KGB Academy,
where they became close personal friends. After working in the
foreign intelligence service, Ivanov became Putin’s deputy in the
National Security Council, and later its head. In March 2001, Ivanov
was appointed Minister of Defense.

Deputy Chief of the Presidential Administration Viktor
Ivanov is another close friend and ally of President Putin. Their
relationship goes a long way back, when they served together in the
KGB and later in St. Petersburg’s city administration, and also in
the Federal Security Service. Ivanov was appointed deputy chief of
Putin’s administration soon after Putin became acting president upon
Boris Yeltsin’s resigning. Viktor Ivanov is considered to be the
most influential of all Putin’s allies.

Nikolai Patrushev also served in the KGB with Vladimir Putin,
becoming the head of the Federal Security Service after the latter
was appointed prime minister. Several chiefs of regional FSB
departments became governors after Patrushev’s appointment. Under
Patrushev’s reign, the FSB has significantly increased its power.

Some of the other high-ranking former FSB men in the Presidential
Administration include its Deputy Director, Igor Sechin, who during
Soviet times worked undercover in Mozambique (officially as an
interpreter), the head of the Presidential Personnel Directorate,
Vladimir Osipov, who is an ex-officer of the central apparatus of
the KGB, and the Deputy Secretary of the Security Council,
Vyacheslav Soltaganov, who served in the Border Troops of the Soviet
KGB.

The regional leaders who belong to the siloviki include the
President of Ingushetia, Murat Zyazikov (former deputy chief of the
Astrakhan Regional Directorate of the FSB), Voronezh governor
Vladimir Kulakov (former Chief of the Voronezh Regional Directorate
of the FSB), and Smolensk governor Viktor Maslov (Chief of the
Smolensk Regional Directorate of the FSB).

Born in 1959. Mr. Abramov has served in similar
roles with Evraz or its predecessors since founding EvrazMetal, the
predecessor of Evraz [Евраз] (the “’Original Group’”), in 1992, and
was a member of the Original Group. Mr. Abramov is also a member of the
boards of directors of NTMK and ZapSib. Mr. Abramov previously
worked at the Institute of High Temperatures of the USSR Academy of Sciences. Mr.
Abramov graduated from the Moscow Institute of Physics and
Technology [Московский физико-технический институ] with a first-class
honors degree in 1982, and he holds a Ph.D. in Physics and
Mathematics [Кандидат физико-математических наук]. Mr. Abramov is a Bureau
member of the Council of Entrepreneurs and a member of the Council
of Entrepreneurs set up by the Government of the Russian Federation."

"Financial Times (UK)August 27, 2003The science of forging a steel empire:Arkady Ostrovsky looks at Alexander Abramov, a former scientist who
became an industrial magnate without political connections

There are no neon signs, big letters or corporate logos on the
facade of the central Moscow headquarters of EvrazHolding [ЕвразХолдинг],
Russia's largest steel producer. Alexander Abramov, who occupies the
top office in the five-storey building, keeps an equally low profile.

He does not appear at society parties, does not like meeting
journalists and is rarely spotted in the corridors of power. Apart
from industry specialists, few have heard of him or his company. But
over the past five years he has amassed the largest steel and iron
empire in Russia, which employs 125,000 people, controls about 22
per cent of the country's total steel output and has an annual
turnover of Dollars 2bn (Pounds 1.3bn).

EvrazHolding is a product of Russia's growth since the 1998
financial crisis and Mr Abramov is representative of the second wave
of Russian magnates who went into business after the best assets had
been taken.

Unlike the first wave of politically connected "oligarchs", such
as Mikhail Khodorkovsky [Михаи́л Бори́сович Ходорко́вский] and
Vladimir Potanin [Владимир Потанин], Mr Abramov had neither
political leverage nor financial resources to help him benefit from
Russia's chaotic privatisation of the 1990s: "I did not believe
privatisation was irreversible in this country and did not want to
be part of it."

But in recent years Evraz-Holding has emerged as one of the most
aggressive vertically integrated business groups in Russia. Its
assets include three large steel mills, three coalmines and several
ore-enriching plants, as well as a large commercial port, Nakhodka [Находка],
in the east of the country.

Secrecy comes naturally to Mr Abramov, who initially seemed
destined to become one of Russia's top scientists. He graduated from
the elite Moscow Institute of Physics and Technology Московский
физико-технический институ] - Russia's answer to the Massachusetts
Institute of Technology. By the age of 31 he was a deputy head of
the Institute of High Temperatures, a research base for Russia's
space and defence programme.

But state funding for research institutes dried up. "By 1990, it
became clear that there (would) be no money for science in Russia.
It was a simple choice - either I had to leave the country as many
of my colleagues did, or to go into business," Mr Abramov says.

One option was to sell high technologies created by his institute.
But he calculated it would take four to eight years to turn a
scientific application into a commercial product: "The country was
deteriorating so fast, I simply did not have time."

He used his contacts with Russia's steel mills, which used
high-temperature technologies, and offered his services not as a
scientist but as a metal trader. "We had good contacts with the
directors of those plants. They knew me personally and this helped
me to get my first trading contracts."

Trading was a popular and quick way to make money in Russia in
the early 1990s. The economy was shrinking, non-payment was a
chronic problem and any offer of cash from a trader was welcomed by
factories.

"The early 1990s were the years of rich traders and poor
factories," says Yakov Pappe [Яков Паппе], a leading Russian
economist and author of a Russian study on oligarchs.

By 1997, trading was less profitable and many trading companies,
including Mr Abramov's, were owed large sums by producers. "This was
the time when either factories started to buy trading companies, or
traders started to buy factories," Mr Pappe says. Mr Abramov chose
the latter and swapped debt for equity in the Nizhny Tagil [Нижний Тагил]
steel mill, while also buying stakes in its rail-producing plant
from other shareholders.

While the first wave of Russian oligarchs grabbed whatever assets
they could, Mr Abramov acquired them in a much more focused way. He
decided to build a monopoly for rail and steel construction products
and looked for factories that would give him synergies.

The only other big factories making these products were in the
industrial region of Kemerovo [Кемерово], also home to Russia's
largest coalmines. Using his old trading contacts with coalmine
bosses, Mr Abramov was introduced to Aman Tuleev [Аман-Гельды Молдагазыевич
Тулеев], populist governor of the region. "In the west these kind of contacts
are made in a golf club. In Russia you meet these people at some
national day of a steel worker, over a shot of vodka," Mr Abramov
says.

The two factories Mr Abramov was interested in were in bankruptcy
in 1998. Salaries had not been paid for up to eight months and
strikes were breaking out.

Mr Tuleev needed good managers. Mr Abramov needed the two
factories. A deal was made. As a state creditor, Mr Tuleev would
help appoint external managers loyal to EvrazHolding to run the
steel mills. Mr Abramov would pay salaries and taxes, guarantee jobs
and support Mr Tuleev's social projects.

This pitched Mr Abramov against Alfa Group [Альфа-Групп], one of
the most influential oligarch groups, which controlled one of the
factories. "It was a tough battle for control and in the end we won.
This was a non-core asset for Alfa and they had bigger fish to fry,"
he says. While groups such as Alfa were shedding non-core assets, Mr
Abramov and his like were building empires. "Abramov managed to
build his business from second-rate assets," says Mr Pappe."

"Roman Arkadievich Abramovich (Russian: Рома́н
Арка́дьевич Абрамо́вич) (born October 24, 1966 in Saratov [Сара́тов], Russian
SFSR, USSR) is a Russian oil billionaire, referred to as one of the
Russian oligarchs. In March 2005 he was listed by
Forbes Magazine as the richest Russian and the 21st richest person in the world
with an estimated fortune of $13.3 billion. (Everyone above him in
the list was older than him; the only one of those within a decade
of his age was computer magnate Michael
Dell, 20 months older). Abramovich is most famous outside of Russia as the owner
of Chelsea
F.C., an
English Premiership
football club, his wider involvement in European football, and for his
contributions to Jewish enterprises in Israel and elsewhere,
reflecting his Jewish origins.

Early Life and Career

Abramovich lost his mother at the age of 18 months and his father,
who was killed in a construction accident, at the age of four.
Adopted by his paternal uncle and raised by his Jewish family of
limited means in the harsh environment of Komi [Коми]
in North West Russia, Abramovich has been able to transform
hardship into significant success.

Abb.: Lage von Komi
[Bildquelle. Wikipedia]

Abramovich attended the Industrial Institute in the city of Ukhta
[Ухта] before being drafted into the Soviet
Army, the Soviet military ground force.

Post-Soviet Privatization, New Wealth and Political Career

Abramovich obtained his wealth by cheaply acquiring shares in
newly-privatised industries after the fall of communism. He became
the majority shareholder in
Sibneft [Сибнефть] , a large oil company, and is also a major shareholder in RusAl,
the world's second-largest aluminium producer, as well as various
other companies.

Abb.: ®Logo

Abb.: Lage von Chukotka
[Bildquelle: Wikipedia]

In 1999 Abramovich was elected to the Russian Duma as the
representative for the impoverished Far East region of
Chukotka [Чукотка]. He started the charity Pole of Hope to help the people
of Chukotka, especially children, and in December 2000 was elected
governor of Chukotka, replacing the corrupt Alexander Nazarov. Since
then he has invested hundreds of millions of dollars in Chukotka,
for example building a college and hotels in Anadyr [Ана́дырь]
and renovating the airport. He has also used Chukotka as a tax haven
for Sibneft and has been exploring for oil there. Abramovich said
that he would not run for governor again after his term of office
expires in 2005, as it is "too expensive" - and he rarely visits the
region. However, Russian President
Vladimir Putin [Влади́мир Влади́мирович Пу́тин] has changed the law to abolish elections for
regional governors, and on
21 October 2005
Abramovich was reappointed governor for another term.

Abramovich and European Football

Abb.: Chelsea FC
[Pressebild Chelsea FC]

UK-Bezug

In 2003
he became the owner of the companies that control
Chelsea Football Club in the
United Kingdom. This immediately raised his profile in
Britain where the
tabloids noted the Russian connection by humorously dubbing the
club Chelski. As soon as Abramovich took control, he poured
massive investment into the Club, bringing to it the finest
footballing and managerial talent that could be obtained, with money
no object. The Club also embarked on an ambitious programme of
commercial development, with the aim of making it a worldwide brand
and not simply a local football club. The result was near-instant
success: Chelsea finished its first season after the Abramovich
takeover in second place in the
Premiership. The following season they moved into first place
and reached, also, the semi-finals of the Champions League. They are
now the dominant force in English football.

Abb.: ЦСКА Москва́(Pressebild CSKA)

In March 2004, Sibneft agreed a three-year sponsorship deal worth
USD 58 million (approx. GBP 30 million, EUR 44.5 million, RUR 1.6
billion) with the Russian team
CSKA Moscow [Профессиональный
футбольный клуб ЦСКА Москва́]. Despite the company explaining that the decision
was made at management level, some viewed the deal as an attempt by
Abramovich to counter accusations of being unpatriotic which
were made at the time of the Chelsea purchase. UEFA
rules prevent one person owning more than one team participating in
UEFA competitions, so Abramovich has no equity interest in CSKA.
Nevertheless, he was named most influential person in Russian
football in the Russian magazine Pro Sport at the end of
June 2004. In May 2005, CSKA won the
UEFA Cup, becoming the first Russian club ever to win a major
European football competition.

Diversification and Distancing from Russia

The proposed merger of Sibneft with Yukos
[ЮКОС]
was seen by most as a distancing of himself from Russia, at a time
when
the Kremlin appears to have decided to bring at least some of
the oligarchs to account for their colourful past business practices.
Abramovich was a close associate of controversial
Boris Berezovsky [Бори́с Абра́мович Березо́вский] who sold him his stake in Sibneft, although in
July 2005 Berezovsky announced his intention to sue Abramovich in
the British courts for pressuring him into selling most of his
Russian assets cheaply to Abramovich after Berezovsky fled the
country.

In 2005, he moved down to second place in the
Sunday Times Rich List of UK residents, as the newspapers
estimate of
Lakshmi Mittal's wealth had more than quadrupled since the
previous year. Abramovich is included in the list despite the fact
that he retains residences in Moscow and Chukotka.

In September 2005 Abramovich sold 72.663% of Sibneft to the
Russian-government controlled
Gazprom [Газпром] for
US$ 13.01 billion (euro
10.81 billion,
GB£ 7.4 billion). The transaction is interpreted as indicating
that he remains on good terms with President
Vladimir Putin, unlike fellow-oligarch
Mikhail Khodorkhovsky [Михаи́л Бори́сович Ходорко́вский] who was recently jailed for eight years.
In addition the Kremlin press service recently confirmed that
Abramovich's name has been sent for approval as governor for another
term to Chukotka's local parliament, which confirmed his appointment
on
21 October 2005.

Other interests and activities

Abramovich is known as a fan of
Formula One and is often seen in the paddock at races; in 2004,
after the sport's owner
Bernie Ecclestone was seen giving Abramovich a tour of the
pitlane at the
Monaco Grand Prix, rumours circulated that he was considering
investing in or purchasing an F1 team.

He owns his own private
Boeing 767-300 known as "The Bandit" due to its paint scheme.

Israel-Bezug

Of Jewish background, Abramovich is a firm supporter of Jewish
causes, seen his funding of several projects in the Abramovich
neighbourhood in
Jerusalem,
Israel
and in
Tel
Aviv."

"Vagit Alekperov (Вагит Юсуфович Алекперов in
Russian, Vahid Yusif oğlu Ələkbərov in Azeri) (born September
1, 1950 in Baku [(Azeri: Bakı,
Russian: Баку)], Azerbaijan [Azərbaycan]) is current President of the leading
Russian
oil company LUKOIL [ЛУКОЙЛ].

Vagit Alekperov, rated by
Forbes magazine as Russia’s tenth richest person, and 122nd richest person
worldwide with US $4.3 billion of net worth, was born in Baku, one
of the earliest centers of the international petroleum industry. His
father, who died when Vagit was a boy, worked in the oil fields all
his life and inspired Alekperov to follow in his footsteps. He was
18 when he landed his first job in the industry.

Vagit Alekperov graduated in 1974 from the Azerbaijan Institute
of Oil and Chemistry. As a student he also worked as a drilling
operator in
Kaspmorneft [Каспморнефт], a
Caspian regional production company.

After graduation, he continued to work there, and by 1979 he had
advanced from engineer to deputy head of a production unit. He had
to work in extreme conditions on offshore oil rigs. On one occasion,
an explosion on his rig threw him into the stormy Caspian
sea [Каспийское море], and he had to swim for his life.

Alekperov moved to Western Siberia [Сибирь]
in 1979 and worked at Surgutneftegaz [Сургутнефтегаз] between 1979
and 1985, earning his reputation as an industry expert. He was
ascending positions and by 1985 became first deputy general director
of Bashneft [Башнефт] production company. In 1987, he became general
director of the newly created production company Kogalymneftegaz [Когалымнефтегаз].

In 1990, Alekperov was appointed deputy minister of the Oil and
Gas Industry of the Soviet
Union and became the youngest deputy energy minister in Soviet history. At that
time, Alekperov promoted establishment of vertically integrated
state-owned energy companies, which would bring together the wide
range of organizations in the energy sector that were, at the time,
reporting to different Soviet bureaucratic institutions.

As deputy minister of the oil and gas industry of the Soviet
Union, Alekperov was engaged in the formation of the first vertically integrated
state-owned energy company, Langepas-Urai-Kogalymneft [ЛангепасУрайКогалымнефть], which was established in
late 1991 as a subsidiary of the Ministry of Fuel and Energy. In April 1993,
Langepas-Urai-Kogalymneft became LUKoil [ЛУКОЙЛ]
Oil Company, with Alekperov as its president. He has remained president of LUKoil since
that time. Employing more than 100,000 people, today LUKoil is among
the world's most powerful oil companies, with reserves second only to Exxon. It's also
the first Russian
company to acquire an American company. In December 1998, Lukoil acquired
Getty Petroleum Marketing and its 1,300 gas stations in the U.S.A. Like
many other
Russian oligarchs, Alekperov has also moved into banking and media."

"Since 1994, Peter Aven [Петр Авен] has
served as President of Alfa- Bank [Альфа-Банк], Russia’s largest and most highly rated
privately owned bank. He is responsible for the Bank’s overall strategy and
for relations with business and government leaders in Russia and abroad.
He has played a central role in developing Alfa-Bank into a market leader
in nearly every category of financial services. Alfa-Bank is routinely
recognized as Russia’s best privately owned bank by publications such as Euromoney
and Global Finance.

Prior to joining the Bank, Peter
Aven was Minister of Foreign Economic Relations for the Russian Federation
in 1991-1992. In this role, he was the guiding force in the development of Russia’s economic
and trade relations with the West, serving as Russia’s representative to the
G-7, and conducting a number of high-level trade and economic missions
to Western capitals. Aven was one of the most influential voices and figures
in the reform circles of the early 1990’s. He was personally responsible for
the establishing the convertibility of ruble and for the liberalization of foreign
trade in the government of Yegor Gaidar [Егор
Тимурович Гайдар].

An economist by training, Aven
spent several years at the International Institute for Applied Systems
Analysis in Laxenburg, Austria (1989-1991) and prior to that was a senior
researcher at the All-Union Institute for Systems Studies at the USSR
Academy of Sciences. Aven holds a PhD in Economics from Moscow State
University (1980).

Abb.: ®Logo von Golden Telecom

He is Chairman of the Board of Directors
of Golden Telecom and Co-Chairman of the Board of Directors of CTC
Media.
He is also a trustee of the Board of the Russian Economic School and a member
of the Board of the Bolshoi Theater [Большой Театр]. Aven is a member of the Board of the
Competitiveness and Entrepreneurship Council of the Russian Federation
government and a trustee of the Board of the National Association for
National Financial Reporting Standards.

Peter Aven is an author of numerous
scientific papers and articles on Economic and Trade Issues and is widely
quoted in the financial and trade press on matters related to the Russian
economy and trade policy. He has received a number of international awards,
most recently by Institutional Investor magazine, when he was named Russia’
Most Admired Executive in Financial Services. Aven is a frequent visitor
to Western capitals where he often lectures on economic developments in Russia.

Peter Aven is a passionate
supporter of the arts and theatre in Russia, and is a major collector of early
twentieth century Russian Art."

The most
notorious of Russia’s oligarchs, Boris Berezovsky was one of the
closest members of President Boris Yeltsin’s [Борис Николаевич
Ельцин] inner-circle but fell
out of favor when Vladimir Putin [Влади́мир Влади́мирович Пу́тин] came to power in 2000.

Full name: Boris Abramovich
Berezovsky [Борис Абрамович Березовский]

Born: January 23, 1946 in Moscow
[Москва]

In 1967, graduated from the Moscow
Forestry Engineering Institute, majoring in electronics and
computer science. Later Berezovsky was accepted to the
Mechanics and Mathematics department of the Moscow State
University [Московский Государственный Университет], earning his Ph.D. at the age of 37

In 1969, was employed as an engineer at
the Scientific Research Center for Hydrometeorology

Between 1969 and 1987, advanced from an
engineering to a management position at the Management
Institute of the Soviet Academy of Sciences

In 1989, formed the Logovaz [ЛогоВаз] automotive
company

In 1994 —1997, served as the chairman of
the board of trustees of Logovaz [ЛогоВаз]

In 1994, became General Director of the
All-Russian Automobile Alliance company (AVVA) [Автомобильный Всероссийский Альянс
(AVVA)]

In 1995, became a member of the board of
trustees of the Russian Public Television (ORT) [ОРТ
— Общественное
Российское Телевидение]

In 1996, elected a member of the board
of trustees of Sibneft (Siberian Oil Company) [Сибнефть]

In 1996-1997 served as Deputy Chairman
of the Russian national Security Council

In 1997 became a member of the
scientific council of the Security Council.

In 1998, elected Secretary of the
Commonwealth of Independent States (CIS). Dismissed in 1999
by President Boris Yeltsin

On December 19, 1999, elected a member
of the State Duma representing Karachayevo-Cherkessiya [Карачаево-Черкесская
республика]

In 2000, left Russia

In 2003, granted political asylum in the
UK

A mathematician and computer programmer by training,
in 1989, Berezovsky left the world of academia to start a business,
becoming one of the most successful entrepreneurs of the period, his
interests including auto industry, oil, aluminium, and mass media.
Berezovsky began his business career by buying and reselling
automobiles from state manufacturer AutoVAZ [АВТОВАЗ]. During the lawlessness
of the early 1990s Berezovsky survived several assassination
attempts, including a 1994 car bomb attack when his driver was
killed.

During the presidency of Boris Yeltsin [Борис Николаевич Ельцин], Berezovsky was one of the
so-called oligarchs who gained access to the president, becoming a
close member of Yeltsin’s inner-circle, unofficially known as the “Family”.
He used this influence to acquire stakes in state companies
including the car giant AutoVAZ, state airline Aeroflot [Аэрофлот], and several
oil properties that he organized into Sibneft [Сибнефть]. He also founded a
bank to finance his operations and acquired several news media
holdings. These media provided essential support for Yeltsin’s
re-election in 1996.

Already one of the most influential members of President Yeltsin’s
entourage, in the mid-1990s Berezovsky openly entered politics and
was appointed secretary of Russia’s National Security Council and
head of the Executive Committee of the CIS. He was
behind the creation of the pro-Kremlin Unity party that came second
(after the Communists) in the 1999 parliamentary elections, as well
as being chief negotiator of the peace treaty that ended the first
Chechen war in 1996.

On July 8, 2000, Russia’s new president Vladimir Putin
announced in his address that Russia would no longer tolerate
’’shady groups’’ that divert money abroad, establish their own ’’dubious’’
security services, and block the development of a liberal market
economy.

Soon after Berezovsky voiced his plans to create an opposition party
led by regional governors and other influential figures threatened
by Putin’s drive for power. At the end of the year the prosecution
declared Berezovsky the main suspect in the misappropriation of
large sums from Aeroflot — Russia’s national airline in which he
owned large stakes. A similar case against Berezovsky dealt with
large-scale fraud in his Logovaz [ЛогоВаз] car company.

Berezovsky left Russia at the end of 2000. In March 2003, he was
arrested in London but released on bail. In October of the same year
he received political asylum in the United Kingdom. His stake in
Russia’s major television company ORT (now First Channel) was sold,
and his own TV6 channel was closed by a ruling of the Russian
Arbitration Court. Still an active critic of President Putin, Boris
Berezovsky is now living under the name of Platon Yelenin.

"Boris Abramovich Berezovsky (Бори́с Абра́мович
Березо́вский) (born January 23, 1946) (Note: Boris Berezovsky is
now officially known as Platon Elenin by the British Home
Office) is a Russian businessman. He was Russia's first
billionaire.

Berezovsky was born to a Jewish family in Moscow [Москва́]. He studied
forestry and then applied mathematics, receiving his doctorate in 1983
and becoming a
Corresponding Member of the
Russian Academy of Sciences [Росси́йская
Акаде́мия Нау́к] in 1991 and a chair of a laboratory
in the RAS
Institute of Control Problems (Институт Проблем Управления).

Berezovsky started in business in 1989 under
perestroika [Перестро́йка] by buying and reselling automobiles from state
manufacturer
AutoVAZ [АВТОВАЗ]. Officially, Berezovsky was called upon as an expert in
development of optimized system of management of the enterprize. In
1992 a new middleman company "Logovaz [ЛогоВаз]" [ЛогоВАЗ] was created with Berezovsky
being its president. Logovaz [ЛогоВаз] became an exclusive
consignment dealer of AutoVAZ.

During the lawlessness of the early 1990s Berezovsky, like many
businessmen, was targeted by the
Russian mafia for extortion, allegedly because of connections
Berezovsky had with the Chechen mafia powerful in Moscow at that
time. He survived several
assassination attempts, including a 1994 car bomb attack. During the presidency
of
Boris Yeltsin [Борис Николаевич Ельцин], Berezovsky was one of the businessmen who gained
access to the president. He used his political connections to
acquire stakes in state companies including AutoVAZ itself, state
airline
Aeroflot [Аэрофлот], and several oil properties that he organized into
Sibneft [Сибне́фть], paying a fraction of the companies' book values.
Berezovsky organized a bank to finance his operations and acquired
several news media holdings as well. These media provided essential
support for Yeltsin's reelection in 1996.

Berezovsky is a leading proponent of political and economic
liberalization in Russia. For this reason he has frequently entered into
politics by investing in liberal media, financing liberal candidates,
making political statements, and even seeking office himself. He was
briefly secretary-general of the
Commonwealth of Independent States [Содружество Независимых
Государств (СНГ)]and later a member of the Duma [Ду́ма].
He strongly opposed the
Second Chechen War but nonetheless supported
Vladimir Putin's [Влади́мир Влади́мирович Пу́тин] 2000 presidential campaign. Putin did not
welcome Berezovsky's views on
Chechnya [Чечня́; Нохчичьо; Ichkeria] or his political clout and opened investigations into
Berezovsky's business activities. Fearing arrest, Berezovsky escaped
to London, where he was granted political asylum. Putin's government
successfully pressured Berezovsky to sell many of his business
holdings. He has been charged with fraud and
political corruption, but the Russian government has not been able to extradite
him.

Berezovsky's image among Russians is generally poor; many
consider him the most unlawful and unethical of the oligarchs and
blame him especially for the country's economic collapse. They
believe that he, like other oligarchs, defrauded the government
through Yeltsin's privatization program. Berezovsky maintains that
he acted within the legal framework of the time, and that the
privatization bidding was closed to prevent corruption rather than
to allow it. A 1996 Forbes magazine article titled "Godfather
of the
Kremlin?", by
Paul Klebnikov, portrayed Berezovsky as a mafia boss who had his
rivals murdered. Berezovsky sued the magazine for libel, and the
dispute was ultimately settled with the magazine retracting both
claims. Klebnikov expanded the article into a book, Godfather of
the Kremlin, that Berezovsky did not contest in court. Klebnikov
subsequently became the editor of the Russian edition of Forbes
and was murdered in Moscow on July 9, 2004.

In 2003 Boris Berezovsky formally changed his name to Platon
Elenin ("Platon" being
Russian for Plato, and Elena is the name of his wife) in the British courts. No
reason has been given - but Platon is the name of the lead character
in a film
Tycoon based on his life. In December 2003 he was allowed to
travel under his new name to
Georgia [საქართველო], which provoked a row between Russia and Georgia.

In September 2005, soon after Ukrainian government led by the
prime-minister
Yulia Tymoshenko [Юлія Володимирівна
Тимошенко] was dismissed by the president
Viktor Yushchenko [Віктор Андрійович Ющенко], former president of Ukraine
Leonid Kravchuk [Леонід Макарович Кравчук] has accused Berezovsky of financing Yushchenko's
presidential election campaign, and provided copies of documents
showing money transfers from companies he said are controlled by
Berezovsky to companies controlled by Yuschenko's official backers.
Berezovsky has confirmed that he met Yushchenko's representatives in
London before the election, and that the money was transferred from
his companies, but he refused to confirm or deny that the companies
that received the money were used in Yushchenko's campaign.
Financing of election campaigns by foreign citizens is illegal in
Ukraine and might potentially lead to Yushchenko's impeachment."

1990 – graduated from the Academy of National Economy [Академию
народного хозяйства (АНХ)] under the Ministerial Council of the USSR
(now is Academy of National Economy under the Government of Russian
Federation).

1973-1976 – worked for Nizhnevartovsk [Нижнева́ртовск] Drilling
Administration as a driller assistant, driller, senior engineer,
chief deputy of the technological department and chief of shift.

1985-1990 – Delegate of the Tyumen Regional Council from Surgut. On
March 18, 1990 Vladimir Bogdanov was elected the National Deputy of
RSFSR on Kogalym territorial district №722 [Когалымскому
территориальному округу №722] (now is Khanty-Mansyisk Independent
District [Ханты-Мансийский автоно́мный
округ]).

Since September, 1990 – Chairman of the Board of directors, «Surgutneftegasbank»
[Сургутнефтегазбанк].

Since 1992 – CEO, OJSC «Surgutneftegas», established on the basis of
the Industrial Association «Surgutneftegas».

Simultaneously from 1993 till June, 1996 Vladimir Bogdanov was the
Chairman of Board of directors, and since June, 1996 – Chairman
deputy of Board of directors, OJSC «Surgutneftegas».

On October 27, 1996 Vladimir Bogdanov was elected Deputy of the
Khanty-Mansyisk Independent District Duma of the second assembling
on the Surgut municipal electoral district.

Since April 1997 – Board member, OJSC «Nafta Moscow» [Нафта Москва].

On June 5, 1998 signed joint claim of leading Russian businessmen
«Appeal of the Russian Business Representatives» ["Обращение
представителей российского бизнеса"] because of the economic
situation in Russian Federation.

In October 1998 Vladimir Bogdanov signed an appeal of several heads
of Russian leading oil companies, which contained suggestion of
avoiding economical crisis in Russian Federation.

Since April 1999 – member of the Issuer Council under the Federal
Commission on the Securities Market.

Since October 2000 – member of the Industrial Council under the
Government of Russian Federation.

On January 14, 2001 was elected Deputy of Khanty-Mansyisk
Independent District Duma (Duma of the third assembling, electoral
district № 17).

In April 2001 – became a member of the steering committee of the
public association «Delovaya Rossiya» [Деловая Россия] [«Business
Russia»].

From 1992 to 1998, he held various managerial posts in the Alfa
Group [Альфа-Групп], one of the largest financial-industrial
conglomerates in Russia. From 1995 to 1998 he held the post of director
of the department of commodity trading at Alfa-Eco [Альфа-Эко],
a major trading company and a part of the Alfa Group.

In 2000, Mr. Khan was appointed Deputy Chairman of the Management
Board of TNK [ТНК]."

As part of the road show for its junior Eurobond issue, Alfa Bank
released a memorandum yesterday revealing that more than 75 percent of
its capital is controlled by board members Mikhail Fridman [Михаил
Фридман], German Khan [Герман
Хан] and Alexey Kuzmichev [Алексей
Кузьмичев]. Their exact shares were not specified, but it was stated
that no one has more than 50 percent of shares and that the three main
shareholder vote together. Mikhail Fridman's ownership of Alfa Bank was an open
secret, although his share ownership in the bank has never been officially
specified. It was commonly thought that he owned more than 50 percent of the
shares in the bank. On the bank's website, AB Holding is listed as the owner of
99.7398 percent of the bank's shares. That holding company is in turn owned by
the ABH Holding Corp., registered in the British Virgin
Islands. Fridman, Khan and Kuzmichev own 77 percent of ABH Holding.

Alfa Bank is Russia's sixth largest bank by both capital (25.22
billion rubles) and net assets (217.51 billion rubles). It began its
road show for ten-year junior Eurobonds in Asia and Europe yesterday.
It hopes to borrow $200 million. It is not rare for Russian banks to
hide the identities of their ultimate owners, but it is becoming
increasingly common for that information to be made public. This new
openness is related to the fact that it is easier for more
transparent banks to receive credit and that that information is
require by the
Central Bank of Russia for admission to the deposit insurance system.
MDM Bank [МДМ-банк]
just revealed that 49.388 percent of its stock is owned by board
members Andrey Melnichenko [Андрей
Мельниченко] and Sergey Popov [Сергей
Попов]. Last year, Globeks [Глобэкс]Bank
revealed that it was owned by bank president Anatoly Motylev [Анатолий
Мотылев]. The main stockholder in Konversbank [Конверсбанк]
and Konversbank-Moscow [Конверсбанк-Москва]
is head of Konvers Group [Конверс
Групп] Vladimir Antonov [Владимир
Антонов], and the controlling stock package in Soyuz [Союз]
Bank belongs to Basic Element [Базэла]
chief Oleg Deripaska [Олег
Дерипаска]."

"Mikhail Borisovich Khodorkovsky (Михаи́л Бори́сович
Ходорко́вский born June
26,
1963) is a Russian businessman.
As of 2004, Khodorkovsky was the wealthiest man in Russia,
and was the
16th wealthiest man in the world, although much of his wealth
evaporated due to the collapse in the value of his holding in the
Russian
petroleum company
YUKOS [ЮКОС].
Until he was jailed, he was considered one of most powerful of the
Russian
business oligarchs.

On
October 25,
2003,
Khodorkovsky was arrested at gunpoint on a
Siberian
airport runway by the Russian prosecutor general's office on
charges of
tax evasion. Shortly thereafter, on
October 31, the government under
Vladimir Putin further took the unprecedented step of freezing
shares of Yukos due to tax charges. The Russian Government took
further actions against Yukos, leading to a collapse in the share
price. It purported to sell a major asset of Yukos in
December 2004.
Khodorkovsky's supporters see Putin's actions against him as
retaliation for Khodorkovsky's support of political groups that
oppose the government's policies, while opponents believe that he
must answer for wrongdoing related to the
privatization of state assets during the 1990s.

On
May 31,
2005, Khodorkovsky was sentenced to nine years in prison. A wide
variety of international
journalists,
politicians, and
businessmen--both in Russia and internationally--consider this
process to be political, and dispute the judgement process itself.

Abb.: Lage des Chita Oblast
[Bildquelle. Wikipedia]

In October 2005 he was moved into prison camp number 13 in the
city of
Krasnokamensk,
Chita Oblast [Читинская область].

Entrepreneurship in Soviet Union

Khodorkovsky grew up in a typical
Soviet environment in Moscow [Москва́]
in a two-room communal apartment. The young Khodorkovsky worked hard,
received excellent grades and was deputy head of
Komsomol [Всесоюзный Ленинский Коммунистический Союз Молодёжи (ВЛКСМ)] (the Communist Youth League) at his university, the
Mendeleev Institute of Chemical Technology.

With partners from Komsomol, and technically operating under its
authority, Khodorkovsky opened his first business in 1986, a private
café; an enterprise made possible by Soviet leader
Mikhail Gorbachev's [Михаи́л
Серге́евич Горбачёв] programme of
perestroika [Перестро́йка] and
glasnost [гла́сность]. Successful, they also imported computers, other
technology, brandy
and a wide range of goods to sell at a profit.

He proved himself a capable
entrepreneur by building an import-export business with a
turnover of 80 million rubles a year (about $10 million USD) by
1988.

Armed with cash from his business operations, Khodorkovsky and
his partners bought a banking licence to create
Bank Menatep in 1989. As one of Russia's first privately owned
banks, Menatep expanded quickly, by using most of the deposits
raised to finance Khodorkovsky's successful import-export operations.

Bank Menatap also got government business, awarded the right to
manage funds allocated for the victims of the
Chernobyl [Чорно́биль] nuclear accident. By 1990, critics suggest the bank
was active in facilitating the large-scale theft of Soviet Treasury
funds that went on at the time prior to and following the collapse
of the USSR in 1991.

In a prophetic statement of the time, Khodorkovsky is quoted as
saying:

"Many years later I talked with people and asked them,
why didn't you start doing the same thing? Why didn't you go
into it? Because any head of an institute had more possibilities
than I had, by an order of magnitude. They explained that they
had all gone through the period when the same system was
allowed. And then, at best, people were unable to succeed in
their career and, at worst, found themselves in jail. They were
all sure that would be the case this time, and that is why they
did not go into it. And I"--Khodorkovsky lets out a big, broad
laugh at the memory--"I did not remember this! I was too young!
And I went for it." (in David Hoffman, "The Oligarchs",
PublicAffairs, 2002)

A fortune built on privatization

Boris Yeltsin's [Борис Николаевич Ельцин] elevation to power in 1991 meant an acceleration
of the market reforms under Gorbachev and created a dynamic business
environment in Russia for entrepreneurs like Khodorkovsky. By then
Bank Menatep was by Russian standards a well-developed financial
institution and became the first Russian business to issue stock to
the public since the
Russian Revolution in
1917.

The bank grew quickly, winning more and more valuable Government
clients such as the Ministry of Finance, the State Taxation Service,
the Moscow municipal government and the Russian arms export agency,
all of whom deposited their funds with Menatep, which Khodorkovsky
mostly used to expand his burgeoning trading empire.

Bank Menatep provided the foundation for Khodorkovsky's bidding
for Yukos in 1995. Yukos says that approximately $1.5 billion USD
has been spent purchasing the assets
that now make up Yukos, with a
market capitalisation of $31 billion USD.

In 1995, the Yeltsin Government decided to privatise sclerotic
state industries, including the state owned oil company Yukos. They
appointed Khodorkovsky's bank Menatep to conduct a public auction
process.

A higher bid from a group of rivals was ruled out of the process
by Menatep on a technicality. Menatep paid $350 million USD for 78%
of the company, which inferred a value of $450 million. When the
company was listed two years later, it was valued at $9 billion.
That transaction—and dozens like it—has led many Russians to believe,
that the oligarchs like Khodorkovsky have stolen their fortunes from
the state.

Foreign business partners complain

Abb.: ®Logo

Amoco—later
taken over by
British Petroleum—was an early partner with Yukos in a highly
prospective Siberian oil field Priobskoye. Amoco spent $300
million developing the oil field before being completely squeezed
out by Khodorkovsky, using methods that would be unlawful in most of
the developed world. In 2003
Priobskoye oil production reached 129 million barrels.

Abb.: ®Logo

When the Russian ruble collapsed in 1998, Bank Menatep collapsed
with it as many of it had borrowed money in foreign currencies. It
lost its banking licence. Three banks, the Standard Bank of
South Africa, Japanese
Daiwa Bank and German West LB Bank, had lent $266 million to
Menatep secured by Yukos shares. Khodorkovsky offered oil instead.
They refused and took possession of the shares. They dumped the
shares very quickly, collecting less than half of their loan,
prompted in a panic sale by Khodorkovsky's public threats of
massively diluting their stake with new shares. While lawful in
Russia at the time, it would not have been so in most of the
developed world. Yukos also sold shares in its main production
subsidiaries to offshore shelf companies believed to be linked to
Khodorkovsky. Daiwa and West LB, suspecting they would end up with
nothing if they persisted, sold out to Standard Bank in mid-1999,
which in turn exited Yukos at the end of 2000.

The two deals gave Khodorkovsky, Menatep and Yukos terrible
notoriety in Western financial circles. Only in 2003 did it feel
sufficiently confident to return to Western banks with loan
proposals.

A new era of transparency

Khodorkovsky is considered one of the first of the oligarchs to
realise that foreign investment was needed in order to build a
global business. In order to attract foreign investment, investors
would be motivated by both greed and fear. Khodorkovsky's tough
treatment of some of the West's largest and most powerful businesses
created a large amount of fear in most investors. His fellow
oligarchs had acted similarly, if not more outrageously at times.
Coupled with the collapse in the ruble in 1998, very few investors,
oil companies or banks were interested in doing business with
Russia.

Khodorkovsky introduced unprecedented transparency at Yukos.
Having once denied owning any shares in Menatep and Yukos, he
confessed his controlling stake. Yukos revealed the identity of its
shareholders for the first time, published accounts following GAAP
standards, and started paying taxes and issuing large dividends.
Khodorkovsky hired many executives from large Western oil companies,
placing them in senior roles and appointed respected
non-executive directors to the board of directors of Yukos.

Bank Menatep—by this stage rebuilt around its St Petersburg
subsidiary which remained solvent—even started lending money to
non-Khodorkovsky businesses. The Bank now claims only 15% of its
loans are advanced to Khodorkovsky group businesses.

As his foreign executives and consultants had predicted the
effect of the new corporate governance principles was a soaring
share price as foreign investors forgave past atrocities and bought
into Yukos, which continues to be heavily discounted for sovereign
risk.

When rival
Alfa Bank was successful in attracting BP to
invest billions in its oil subsidiary in 2003 many regarded this as
a turning point in Western confidence in investing in Russia.
President
Putin [Влади́мир Влади́мирович Пу́тин] and Prime Minister
Blair both attended the signing ceremony, signalling the growing
respectability of business in Russia.

Political ambitions

Khodorkovsky also became a philanthropist, whose efforts include
the provision of internet-training centres for
teachers, a forum for the discussion by journalists of reform
and
democracy, and the establishment of foundations which finance
archaeological digs, cultural exchanges and summer camps for
children. Khodorkovsky's critics saw this as political posturing, in
light of his funding of several political parties ahead of the
elections for the
State Duma [Государственная дума] to be held in late 2003.

He is openly critical of what he refers to as 'managed democracy'
within Russia. Careful normally not to criticise the elected
leadership, he says the military and security services exercise too
much authority. He told The Times:

"It is the Singapore model, it is a term that people
understand in Russia these days. It means that theoretically you
have a free press, but in practice there is self-censorship.
Theoretically you have courts; in practice the courts adopt
decisions dictated from above. Theoretically there are civil
rights enshrined in the constitution; in practice you are not
able to exercise some of these rights."

The merger

In April 2003, Khodorkovsky announced that Yukos would merge with
Sibneft, creating an oil company with reserves equal to those of
Western petroleum multinationals. Khodorkovsky has been reported to
be negotiating with
ExxonMobil and
ChevronTexaco about them taking a large stake in Yukos. Sibneft
was created in 1995, at the suggestion of
Boris Berezovsky [Бори́с Абра́мович Березо́вский], comprising some of the most valuable assets of
a state-owned oil company. In a controversial auction process,
Berezovsky acquired 50% of the company at what most agree was a very
low price.

When Berezovsky had a confrontation with Putin, and felt
compelled to leave Russia for London (where he was granted asylum)
he assigned his shares in Sibneft to
Roman Abramovich [Рома́н Арка́дьевич Абрамо́вич]. Abramovich subsequently agreed to the merger.

With 19.5 billion barrels (3 km³) of oil and gas, the merged
entity owns the second-largest oil and gas reserves in the world
after ExxonMobil. YukosSibneft will be the fourth largest in the
world in terms of production, pumping 2.3 million barrels (370,000
m³) of crude a day.

Khodorkovsky's prosecution

There is a widespread opinion that singling out Khodorkovsky for
prosecution is related to his political ambitions.

The
arrest in early July 2003 of
Platon Lebedev, a Khodorkovsky partner and second largest
shareholder in Yukos, on suspicion of illegally acquiring a stake in
a state-owned
fertiliser firm, Apatit, in 1994, was considered by observers a
shot across the bows. The arrest was followed by investigations into
taxation returns filed by Yukos, and a delay to the
antitrust commission's approval for its merger
with Sibneft.

The warning was not heeded, as Khodorkovsky continued his
involvement in the political process in the lead-up to the
presidential elections scheduled for 2004. Khodorkovsky has spoken
out in favour of closer ties with the
United States, was in favour of the U.S. toppling of Iraqi
President
Saddam Hussein [صدام حسين عبد المجيد التكريتي] and — paradoxically for an oil man — advocated
lower but stable oil prices as being good for Yukos and the world
economy. He cultivated close ties with government and business
figures in the U.S.

Finally, Khodorkovsky was himself arrested in October, 2003,
charged with fraud and tax evasion. The Russian Prosecutor General's
Office claims Khodorkovsky and his associates cost the state more
than $1 billion in lost revenues. Khodorkovsky's supporters say the
arrest is politically-motivated and will have a devastating effect
on Russia's nascent financial markets.

The spectacular and heavy-handed method of Khodorkovsky's arrest
attracted as much attention as the fact he was charged with serious
crimes. Many saw it as a sign that President Putin was favouring a
very tough approach with prominent business leaders, regardless of
how it was perceived by foreign investors. The received wisdom of
Russian political circles is that tough, decisive leadership wins
votes, particular if exercised against unpopular figures like the
oligarchs.

Around 5 A.M. on
October 23,
2003,
Khodorkovsky's private jet landed at
Novosibirsk Tolmachevo Airport [Новосиби́рск Аэропорт Толмачево] in transit to a Yukos refinery
production centre in
Angarsk [Ангарск], East
Siberia. He had been making a series of visits to Yukos and
Sibneft properties, which are in some of Russia's most remote
territories. Forewarned to his arrival,
FSB [ФСБ] (the domestic successor of the KGB [КГБ])
agents lay in wait. The plane needed refuelling and had some minor
technical problems.

Then two vans with heavily tinted windows drove across the
airport. Fifteen masked operatives wearing FSB issued black combat
fatigues leapt out of the vans and stormed the plane. Several dozen
more agents armed with
assault rifles and pistols surrounded the jet.

Khodorkovsky was in the passenger compartment with several staff
members and security guards, who were unarmed, as they were required
to hand their weapons to the pilots while on board. He was arrested
and immediately flown to Moscow and presented before the Basmanny
Court, which ordered his detention pending further investigation and
trial.

The impact of Khodorkovsky's arrest

Initially news of Khodorkovsky's arrest had a significant effect
on the share price of Yukos. The Moscow stock market was closed for
the first time ever for an hour in order to assure stable trading as
prices collapsed. Russia's currency, the ruble [рубль],
was also hit as some foreign investors questioned the stability of
the Russian market. Media reaction in Moscow was almost universally
negative in blanket coverage, some of the more enthusiastic
pro-business press discussed the end of capitalism, while even the
Government owned press criticised the "absurd" method of
Khodorkovsky's arrest.

Yukos moved quickly to replace Khodorkovsky, replacing him as CEO
of Yukos with Russian born U.S. citizen Simon Kukes, an experienced
oil executive.

The
U.S. State Department said the arrest "raised a number of
concerns over the arbitrary use of the judicial system" and was
likely to be very damaging to foreign investment in Russia, as it
appeared there were "selective" prosecutions occurring against Yukos
officials but not against others.

A week after the arrest, the Prosecutor-General froze
Khodorkovsky's shares in Yukos to prevent Khodorkovsky from selling
his shares although he retains all his rights to vote the shares and
to receive dividends.

The move alarmed foreign investors and policymakers alike, though
Russian citizens--who largely viewed all of Russia's oligarchs as
having enriched themselves on the backs of a far less fortunate
Russian people--were largely supportive of the arrest.

Supporters viewpoint

Khodorkovsky's supporters point to the Russian
Prosecutor-General's summoning of the Khodorkovsky's lawyer on the
lawyer's activities as evidence that Russian authorities are
over-zealous, if not corrupt. President Putin denied that he had
played an active role in the prosecution, saying that the
prosecutors' move showed that no one was above the law. Some also
question the impartiality of the Basmanny Court and one of its
judges who approved Khodorkovsky's arrest, Andrei Rasnovsky who is a
former employee of the Prosecutor-General's office. The Basmanny
Court is in the same district as the investigative division of the
Prosecutor-General's office, which is the official reason why it is
generally the forum for hearing its cases. Some say it is because
many of the judges in that court are former employees of the
Prosecutor's office and remain loyal to it. One of Yukos' lawyers
say there is not even an attempt to conceal their bias, with judges
seen in private discussions with prosecutors prior to hearings.

President Putin's chief of staff
Alexander Voloshin [Александр Стальевич Волошин], regarded as close to former President
Yeltsin and to some of the oligarchs, disagreed that Putin had no
role in the prosecution and tendered his resignation in protest at
Khodorkovsky's arrest. The resignation of the pro-business Chief of
Staff was said to augur a new era of the domination of military and
security services figures within the Kremlin say some.

Khodorkovsky is not taking the arrest or the prosecution lying
down, threatening to bring defamation lawsuits against the
Prosecutor-General and his officials, which is not likely to be
heard in the Basmanny Court. Those proceedings will display the
resources Khodorkovsky is able to bring to bear to challenge the
activities of the prosecution team. The Prosecutor-General is an
influential factor throughout the Russian legal system but does not
enjoy the same dominance in other courts as he does in the Basmanny
Court.

Critics viewpoint

There is an obvious contradiction about Khodorkovsky protesting
alleged process law violation by the prosecutors, and his own
treatment of law during privatisation. In a broader sense, there is
a dilemma facing Russian businesspeople who have made their fortunes
during the 90s. On one hand today they support rule of law and
protection of private property rights. On the other hand many of
them are against enforcing this same law when applied to suspected
cases of corruption and fraud in a very recent past.

As long as this contradiction remains, Russian business elite is
vulnerable not only to government pressure, but to legal attacks
from newcomers to the market. Khodorkovsky's case has little to do
with his political views and a lot with some people's desire to
re-distribute Russian property again, this time acting strictly
within the law and using official law enforcement agencies as a
tool.

The fact that the overwhelming majority of Russians are favorably
disposed to the Government's belated enforcement of law in the case
of Khodorkovsky is downplayed or ignored in the Western press. This
phenomena is not unexpected, as it is an easy ploy to dismiss
ordinary Russians as somehow uninformed, or ignorant, or biased.

Formal charges

Prosecutors say they operate independently of the elected
government. The Prosecutor-General Vladimir Ustinov was appointed by
former President Yeltsin and is not seen as being particularly close
to Putin who once tried to remove him. However, he is politically
ambitious and prosecuting Russia's most prominent and successful
oligarch is perceived as a boost to his political career and
intended candidacy for the Duma.

The formal charges against Khodorkovsky read as follows:

"In 1994, while chairman of the board of the Menatep
commercial bank in Moscow, M. B. Khodorkovsky created an
organized group of individuals with the intention of taking
control of the shares in Russian companies during the
privatisation process through deceit and in the process of
committing this crime managed the activities of this company."

He is charged with acting illegally in the privatisation process
of the former state-owned mining and fertiliser company Apatit. It
is alleged that the CEO of Bank Menatep and large shareholder in
Yukos
Platon Lebedev assisted Khodorkovsky. Lebedev was arrested and
charged in July 2003.

According to the prosecution, all four companies that
participated in the privatization tender for 20% of Apatit's stock
in 1994 were shell companies controlled by Khodorkovsky and Lebedev,
registered to create an illusion of competitive bidding that was
required by the law. One of the shell companies that won that tender
(AOZT Volna) was supposed to invest about US$280 million in Apatit
during the next year, according to their winning bid. The investment
wasn't made and Apatit sued to return their 20% of stock. At this
point, Khodorkovsky et al. have transferred the required sum into
Apatit's account at Khodorkovsky's bank Menatep and sent the
financial documents to the court, so Apatit's lawsuit was thrown
out. The very next day the money was transferred back from Apatit's
account to Volna's account. After that the stock was sold off by
Volna in small installments to several smaller shell companies,
which were, in turn, owned by more Khodorkovsky-owned companies in a
complicated web of relationships. Literally dozens of companies were
registered for these purposes in Cyprus, Isle of Man, British Virgin
Islands, Turks & Caicos and other offshore havens. Volna has
actually settled the Apatit lawsuit in 2002 by paying $15 million to
the privatization authorities, even though it didn't own Apatit
stock anymore at the time. However, according to the prosecution,
that $15 million sum was based on the incorrect valuation which was
too low. Allegedly, at the time Apatit was selling off the
fertilizers it was producing to multiple Khodorkovsky-owned shell
companies below market value, and, therefore, Apatit formally didn't
have much profit, lowering its valuation. Those shell companies then
resold the fertilizer at the market value, generating pure profit
for Khodorkovsky, Lebedev and others.

In addition, prosecutors are believed to be conducting extensive
investigations into Yukos for offences that go beyond the financial
and tax-related charges currently filed. They say there are three
cases of murder and one of attempted murder that they believe are
linked to Yukos, if not Khodorkovsky.

One area of interest to the Prosecutor-General includes the 1998
assassination of the mayor of
Nefteyugansk in the Tyumen
region [Тюме́нская о́бласть], Vladimir Petukhov. Nefteyugansk was the main centre of oil
production within the Yukos empire. Suspicions arose in Nefteyugansk
because Petukhov had publicly and frequently campaigned about Yukos'
non-payment of local taxes.

President Putin himself commented on this aspect of the
investigation while questioned about the investigation into Yukos in
September 2003. President Putin said:

The case is about Yukos and the possible links of
individuals to murders in the course of the merging and
expansion of this company...the privatizations are the least of
the reasons for it...in such a case, how can I interfere with
prosecutors' work?

Jail time

On
May 30,
2005 Mikhail Khodorkovsky was sentenced to 9 years of jail
sentence in colony of general regime. He is kept in Moscow
prison
Matrosskaya Tishina.

Since
19 August 2005
Khodorkovsky is on a dry hunger strike (refuses food and drink)
trying to protect his friend and associate
Platon Lebedev from the punishment cell of the jail.
According to Khodorkovsky, Lebedev has
Diabetes mellitus and heart conditions and keeping him in the
punishment cell is equivalent to murder.

On
August 31 2005 , he announced to stand for parliament. The movement was based on the legal loophole: a convicted felon
cannot vote or stand for a parliament, but if his case is lodged
with the
Court of Appeal he still has all the electroral rights. Usually
it requires around a year to get somebody's appeal through the
Appeal Court, so it should have been enough time for Khodorkovsky to
be elected. To imprison a member of Russian parliament, the
parliament should vote for stripping his or her immunity, that might
be difficult in the case of Khodorkovsky. Thus, he had a hope to
escape from his prosecution. But the plans were flawed, the Court of
Appeal took only a couple of weeks to process Khodorkovsky's appeal,
reduce his sentence by one year and invalidated any Khodorkovsky's
electoral plans until the end of his sentence.

As reported on
October 20,
2005
Khodorkovsky was delivered to the labor camp YaG-14/10 (Исправительное
учреждение общего режима ЯГ-14/10) of
Krasnokamensk town near Chita [Чита]. The labor camp is attached to
Uranium mining and processing plant and during Soviet times had
a reputation of a place from where nobody returned alive. According
to the news-reports, currently the prisoners are not used on the
Uranium mining and have much better chances of survival than in the
past.

It is predicted that he might be out by the end of 2009.

An attempt at martyr creation

Khodorkovsky supporters are attempting to turn his conviction and
imprisonment into status as a martyr.
Irina Khakamada [Ирина Муцуовна Хакамада], a former leader of the
Union of Right Forces party [Союз
Правых Сил, СПС], claimed that Khodorkovsky's
imprisonment was making the once hated oil billionaire into a
political hero. She asserted:

"The longer he sits in jail, the more of a political
figure he will become. Russians love martyrs. They will forget
that he is an oligarch. "

Others pointed to his unpopularity and his Jewish background as
insurmountable obstacles to his election in a country with a
centuries-old tradition of
anti-Semitism, and a long history of belief that honest work
cannot make you rich."

"Oleg V. Deripaska [Олег Владимирович Дерипаска]
was born in the city of Dzerzhinsk [Дзержинск] in Nizhny Novgorod
Region [Нижегородская область] on January 2, 1968.

Mr. Deripaska has two university degrees: he was an honor student
at the Physics Department of the Moscow State University [Московский государственный университет им. М. В. Ломоносова],
and the Plekhanov Economics Academy.

In 1994 the 24-year old university graduate became the head of
one of Russia's largest aluminium plants in the eastern Siberian
city of Sayanogorsk [Саяногорск] (Republic of Khakasia [Республика
Хакасия]). Under the leadership of the youngest general director in
Russia, the nation's third largest electrolysis factory came to be
ranked as the best in the industry in terms of profit margins,
technological development, product quality and environmental safety
record.

Three years later, Oleg Deripaska became the driving force behind
the first vertically integrated industrial concern in post-Soviet
Russia, the Sibirsky Aluminium [Сибирский алюминий], the nucleus of
which was the Sayan Aluminium Works. This holding structure
subsequently came to include a number of Russia's leading aluminium
plants, which continue to turn out a broad array of aluminium
products and alloys ranging from rolled goods and semi-finished
products to complex architectural constructions, parts and
components for aeronautics, space, auto making and the ship-building
industries. Other manufactured products include general-purpose
containers, aluminium foil packaging, large-size railroad containers
and custom-order freight platforms. Sibirsky Aluminium was ranked
among the world's top 10 aluminium producers only three years after
Mr. Deripaska took over the company's leadership. Oleg Deripaska is
currently Chairman of the Board of Directors of Russian Aluminium [Русский
алюминий], set up in the autumn of 2000. This aluminium company is
rated number two in the wo rld in terms of output and equity. The
company is 70% owned by Russian capital and produces over 10% of the
world's total volume of aluminium products.

Mr. Deripaska is the Vice President of the Russian Union of
Industrialists and Entrepreneurs, Chairman of the Executive Board of
Russian National Committee of International Chamber of Commerce, the
World Business Organization, and sits on the Trusteeship Council of
the National Military Foundation, the member of the Competitiveness
and Entrepreneurship Council, chaired by the Prime minister of
Russia, one of the founders of the charitable National Science
Support Foundation.

Oleg Deripaska was the recipient of a special Friendship Award
under a decree issued by Boris Yeltsin [Борис Николаевич Ельцин] in
1999. He was named businessman of the year for his contribution to
management in 1999 by Vedomosti [Ведомости], an authoritative
Russian newspaper published in partnership with The Wall Street
Journal and The Financial Times. In addition, he was named "Best
Manager 2000" among Russia's metallurgical sector by Kompania [Компания],
a weekly periodical."

"Oleg Deripaska [Олег Владимирович Дерипаска],
born in 1968, is Russia's youngest billionaire at age 35. Deripaska
accumulated a business empire through a series of ruthless and
elaborate, though technically legal, takeover raids. When the Soviet
Union collapsed in 1991, he was a 23-year-old student at Moscow
State University [Московский государственный университет им. М. В. Ломоносова].
He soon got a job in the fledgling metals trading market. By 1994,
he was chief financial officer of Aluminprodukt. Through the company,
he bought a stake in a Siberian smelter plant, beginning his ascent
to the top of one of Russia's roughest industries. Deripaska became
the plant's manager to protect it from a takeover by its former
owner, who once threatened him with a grenade launcher. Later,
Deripaska waged his own revolt to take over the shares of the
London-based Transworld Group, then owned by controversial
multimillionaire Mikhail Chernoi. Fellow oligarch Roman Abramovich [Роман Аркадьевич Абрамович]
became Deripaska's partner; in early 2000, the two created a joint
venture called Russian Aluminum (RusAl [РУСАЛ]). Today, RusAl has $4
billion in annual sales and is the world's second-largest aluminum
producer. Deripaska owns 75 percent of the company. His other
businesses include power stations, Russia's largest car and
commercial vehicle manufacturer, and the country's largest insurance
company.

Political Connections: Deripaska is married to Polina Yumashev,
the daughter of former President Boris Yeltsin's chief of staff.
Deripaska's father-in-law in turn married Yeltsin's daughter, which
makes Deripaska a grandson of Yeltsin by marriage. In the current
political climate of struggles between the Kremlin and oligarchs,
Russian news media speculated in July 2003 that Deripaska would be "next
in line" for investigations of his business practice by the Kremlin.
One of Deripaska's deputies at Russian Aluminum, the executive in
charge of contacts with state agencies, is running in the December
2003 election for the State Duma (the lower chamber of the Russian
parliament) on the ticket of the center-right, ruling Liberal
Democratic Party of Russia.

New Plays: In October 2003, Deripaska bought an additional 25
percent stake of Russian Aluminum for an estimated $2 billion from
fellow oligarch Roman Abramovich.

Lifestyle: For more than a year, Deripaska has flown by private
jet to London every week to improve his English. Yet, unlike his
fellow oligarchs, Deripaska says he has no interest in leaving
Russia. In addition to his home in Moscow, Deripaska owns a country
house in the wild southern region of Khakassia.

Notoriety: In late 2000, a competitor filed a civil suit for
racketeering against Deripaska and his company in a New York court,
including charges of bribery, judicial corruption and armed force.
The judge dismissed the case on jurisdictional grounds. Deripaska
was barred from travel to the United States and from entrance to the
Davos economic summit in Switzerland. Deripaska has also become an
outspoken opponent of Russia's entry into the World Trade
Organization, clashing on the issue with U.S. ambassador to Russia
Alexander Vershbow."

Mikhail Fridman [Михаил Маратович Фридман](born 26 June 1963)
is a Russian businessman. He is one of the youngest of
Russian oligarchs (Roman Abramovich [ома́н Арка́дьевич Абрамо́вич] is younger).

Along with Peter Aven, Fridman founded the Alfa Group Consortium [Консорциум
Альфа-Групп], a
holding company which today controls Alfa Bank (opened in 1991),
Alfa Capital [Альфа-Банк],
Tyumen Oil and several construction material firms (cement, timber,
glass) as well as food processing businesses and a supermarket chain.
The two are also major holders of tea and sugar plant processors.

Fridman in 2003 sold half of his Alfa group's oil subsidiary
Tyumen Oil to BP for $6.15 billion, so far the biggest foreign
investment ever in a Russian company.

In July 2005 he was involved in a privatization scandal. Two
luxury houses formerly owned by the government were sold in 2003 for
a price significantly below market value to two companies, one of
which is owned by Fridman and another by the former Russian
prime-minister,
Mikhail Kasyanov [Михаи́л Миха́йлович Касья́нов]
and Kasyanov's wife Irina. Fridman has said that he wasn't surprised
at the low price of the house he bought because another company held
a 49-year lease for that house at the time (however, that lease was
bought out very cheaply a week after the auction for the houses),
and that he's not aware of the details of the sale as it was handled
by his corporation's legal department. According to later
allegations made by the State Duma member and journalist Aleksandr
Khinshtein [Александр Хинштеин], Kasyanov bought the company that
owns one of the houses using a loan given to him by Fridman, and one
of Fridman's companies won the government-conducted tender to manage
the
Sheremetyevo [Шереметьево] International Airport
a week after the houses auction, allegedly with some Kasyanov's
involvement."

Mikhail Fridman is Chairman
of the Board of Directors and principal founder of the Alfa Group Consortium
[Альфа-Групп], one of the
leading business enterprises in Russia. He has built the Alfa Group into
a market leader in Banking, Energy, Telecommunications and Retail sales.
Fridman chairs the Board of Directors of two of the groups leading
companies — Alfa-Bank, which is Russia’s largest privately owned bank,
and TNK-BP [ТНК-BP], formed by the historic joint venture between British
Petroleum and Tyumen Oil Company, completed in 2003.

Mikhail Fridman is one of Russia’s most
influential and successful business leaders. His strategies of acquisition,
growth and integration have made the Alfa Group among the most
attractive partners for international investment in Russia. The historic
joint venture with British Petroleum, announced in the summer of 2003
was, at that time, the largest foreign investment deal in Russian
history, valued at over US$7 billion. The agreement was made possible by historic
cooperation between Russian President Putin and British Prime Minister
Blair in addition to the work of the two companies.

Along with its previous
position in Vimpelcom, Russia’s number two mobile telephone operator,
Alfa has recently acquired a blocking stake in Megafon [Мегафон], making the
consortium co-owners of the two of three major market leaders in the
Russia’s rapidly growing mobile communications market.

Mikhail Fridman started out
in business while still a student at the Moscow Institute of Steel and
Alloys. He graduated in 1986 and two years later founded Alfa Eco
[Альфа-Эко], a trading
company out of which Alfa Group Consortium developed. During the
tumultuous period of the 1990’s Fridman was close adviser to President
Boris Yeltsin and helped lay the foundation for the modern Russian
economy that has emerged in the new millennium. Fridman was born in Lvov
[Львів],
Ukraine on 21 April 1964.

Fridman is a Member of the
International Advisory Board of the Council on Foreign Relations, and
his achievements have been recognised by prestigious international
publications and organisations in the world of finance and business.
He was named to the list of “Europe’s Power 25” by FORTUNE in 2004,
as well as the Financial Times list of the “2004 Leaders of the New
Europe.” In 2003 Mikhail Fridman was honored with the Golden Plate Award
of the International Academy of Achievement in Washington, presented
personally by former US President Bill Clinton."

Vladimir Gusinksy [Владимир Гусинский],
51, emerged from the underground economy of the era of the Soviet
Union, like many of Russia's oligarchs. But among this group,
Gusinsky was unique: Much of his wealth was created from scratch
instead of from taking over former state properties. Born in 1952,
he was the only child of a family who experienced the pain of Soviet
repression firsthand. Gusinksy's maternal grandfather was shot
during Stalin's purges, and his grandmother spent 10 years in a
Soviet-style labor camp. He lived with his parents in a one-room
flat in Moscow, but Gusinksy "grew up on the street," as he later
put it. He attended the Gubkin Institute of Petrochemicals and
Natural Gas but failed his classes, so he joined the army. Later,
Gusinsky attended Gitis [ГИТИС], a school for theatrical directors,
and became a theatrical producer in the provinces. He also drove a
cab and traded on Moscow's black-market street scene.

In 1987, with just $1,000, he opened a women's clothing
cooperative, one of Russia's first state-approved cooperatives.
Two years later, he opened MOST, a consulting co-op for foreign
investors in Russia, which gradually branched out into media,
ultimately becoming Media-MOST. In 1993, Gusinsky launched his
first independent newspaper, Sevodnya, which put him on
his way to becoming "Russia's Rupert Murdoch." Using connections
from his earlier days, Gusinsky called upon Deputy Mayor of
Moscow Yuri Luzhkov for help in gaining control of the
television station Channel 4. With Russia's war in Chechnya just
beginning, Gusinsky's station was critical of President Boris
Yeltsin and his policies. In 1996, however, when a Communist
Party presidential candidate presented a real threat to
Yeltsin's reelection, the rising media magnate suspended all
criticism. After Yeltsin won the reelection, Gusinsky was
awarded the country's first private television network, NTV, and
his media conglomerate, Media-MOST, expanded to include a
satellite communications network, a series of radio stations and
magazines, such as Itogi, jointly published with
Newsweek. By 1999, Gusinsky reverted to his critical
attitude toward the Yeltsin government and carried on his
network a series of reports about the Yeltsin family and friends
running the Kremlin. Yeltsin did nothing to force Gusinsky off
air, but President Vladimir Putin was another story. Putin waged
a string of attacks against Gusinsky, who now lives in exile.

Estimated Worth: Unknown

Major Holdings: While Gusinsky was in exile, the state gas
monopoly Gazprom seized control of Gusinsky's NTV, valued at $1
billion. A Russian court also ordered the liquidation of Media-MOST
and gave the gas giant 25 percent plus one share of all companies
once owned by Media-MOST. Gazprom also took control of and closed
Gusinsky's first newspaper Sevodnya and fired and locked out
the staff of news magazine Igoti.

Political Connections: Gusinsky was connected to Moscow's former
deputy mayor, Yuri Luzhkov [Юрий Михайлович Лужков], who helped Gusinsky grow his MOST Bank
and gain control of key media enterprises. Gusinsky knew Luzhkov
when the former deputy mayor was in charge of handling Moscow's
cooperative licenses. The two became friends and even toured the
United States together, courting corporate giants who wanted to
enter the emerging Russian market.

Despite Gusinsky's critically daring media coverage of the
Kremlin, for a time he was considered part of Yeltsin's [Борис
Николаевич Ельцин] inner circle.
He was a member of the Big Seven, a group of oligarchs who backed
Yeltsin's reelection campaign, and he even lent Yeltsin his chief
aide to handle the president's media efforts.

New Plays: Since leaving Russia, Gusinsky has been active in
religious and humanitarian causes within and outside Russia,
including the Russian Jewish Congress [Российский
еврейский конгресс] and the World Jewish Congress.

Israel-Bezug
USA-Bezug

Spanien-Bezug

Lifestyle: Previous to his exile, Gusinsky lived in Moscow and
owned a villa in the southern Spanish province of Cadiz. Today, he
lives in Tel Aviv [תל אביב-יפו], Israel, and in Greenwich, Connecticut.

Notoriety: On his NTV network, Gusinsky broadcast a satiric
puppet show, Kukly, that ridiculed the Russian political and
business establishment. Putin tried to terminate the program, but
Gusinsky persisted. When NTV was critical first of Putin's slow
reaction to the sinking of the nuclear submarine Kursk, then
of the government's inability to provide heat and electricity for
freezing residents in Russia's Far East, Putin stepped up his
anti-Gusinsky campaign. Media-MOST's headquarters and offices were
raided more than 30 times by everyone from masked tax police to
deputies of the prosecutor general. In June 2000, Gusinsky was
arrested on charges of embezzlement and spent three days in a Moscow
jail. In 2001, before a Spanish high court threw out the case, he
was confined to house arrest in his Spanish villa for several months,
on fraud charges brought by the Russia government. This year,
Gusinsky has been arrested again, this time in Athens on an
international warrant for similar charges. Gusinsky was released,
and a Greek court rejected Russia's request for extradition."

It was a dramatic end to a meteoric rise. Mr Ivanishvili [Борис Иванишвили]
is one of Russia’s lowest-profile oligarchs who grew rich during the
era of president Boris Yeltsin [Борис Николаевич Ельцин]. He is
RKB’s [Российский кредит, Rossisky Kredit Bank] majority shareholder
along with his partner Vitaly Malkin [Виталы Малкин], who holds a
minority share in the bank but was its public face.

The two men were academics and met in the 1980s at the state
railway institute, where Mr Ivanishvili was studying for a
post-graduate degree in physics and Mr Malkin was a PhD candidate in
Latin. As perestroika [Перестро́йка] rolled back the state
controls, they made their first fortune importing cheap computers
and video recorders from China. With hard currency in their pockets,
their next venture was to found five banks in the early 1990s
selling dollars in the midst of hyperinflation.

“You could make extraordinary profits from the wholesale of hard
currency in those days. If you could get hold of banknotes and
deliver them to cash offices then you could earn 20% a day. The
people were not hungry, but they were trying to protect their life
savings by buying dollars and holding on to them,” says Mr Eropkin.

By the middle of the 1990s, Mr Ivanishvili was a multimillionaire
and began snapping up privatisation vouchers as Russia’s industrial
jewels were put under the gavel by a cash-strapped state. He shied
away from the politically-charged scrum over the oil and metal
companies, preferring to buy up the biggest iron ore mines, known as
GOKs [ГОК] in Russian, which have only recently come into their own.

RKB was on the verge of moving into the big league in the months
before the crisis. Mr Malkin was invited to Mr Yeltsin’s [Борис
Николаевич Ельцин] so-called oligarch meetings in the months leading
up to devaluation, as the sick president called on Russia’s captains
of industry to bail out the state. But it was too little, too late.
After the collapse of the currency, both Mr Ivanishvili and Mr
Malkin dropped off the radar until last year.

Sticking it back together

In the winter of 1998, the government began to pick up the pieces.
A law on restructuring banks was passed and state agency ARCO
[Agency for Restructuring Credit Institutions, Агентства по
реструктуризации кредитных организаций (АРКО)] was set up to
organise it. Most of the big banks went belly up but RKB was one of
the few that was placed in ARCO’s care. Mr Ivanishvili offered to
put his industrial holding into the pot and hired KPMG to thrash out
a realistic restructuring plan.

RKB had $2bn of liabilities on its balance sheet when it closed
its doors, but no cash. The international creditors accepted a $1bn
restructuring deal but insisted on a 10% down payment.

“Ivanishvili was forced to sell his biggest and best iron ore
mine, Lebedansky GOK, which fetched a mere $50m. Compare this with
the sale of Mikhailovsky GOK last year [the second biggest iron ore
mine and also part of the group], which was the deal of the year and
raised over $1bn,” says Mr Eropkin, who negotiated the agreement
with the creditors.

As Russia’s economy began to grow strongly in 2000, the task
became easier. Depositors were paid off two years ago and the bank
has been meeting scheduled payments on the rest.

Back in black

Mr Ivanishvili is bucking the trend: while the other oligarchs
are consolidating their industrial holdings and expanding overseas,
he has changed tack and is in the process of dumping his industrial
holdings in favour of finance. He has invested about $3bn from
recent assets sales into the Russian blue-chip utilities company
United Energy Systems, oil major Lukoil [ЛУКОЙЛ]and gas monopoly
Gazprom [Газпром] through his financial holding company Unicor [УНИКОР]
(formerly Metaloinvest).

Last year, he hired London-based Daiwa Securities to look at the
Russian banking sector and decide if there was a future for a
medium-sized Russian bank in the market. They decided there was. Mr
Ivanishvili has begun to build up RKB [Российский кредит, Rossisky
Kredit Bank] and at the start of this year he pumped another
$25m into the capital of Impexbank [Импэксбанк], which targets
retail and small and medium-sized enterprises (SMEs).

Impexbank survived the 1998 crisis and is now flourishing by
going into 43 of the more sparsely serviced Russian regions, which
now account for 80% of its loan portfolio. Impexbank chairman Pavel
Lysenko says profits from the regional business are so high that
capital invested to open regional offices can be earned back in less
than 18 months. The bank already ranks 12th in terms of household
deposits and sixth in terms of SME loans.

“There is enough for everyone. Despite the 1300-odd licensed
banks, Russia is actually under-banked. The nominal rates of loans
are high and still we are growing very fast. We finished 2004 with
$87m in retail loans. Now we have $270m [by the middle of 2005] and
the forecast for the end of this year is $500m,” says Mr Lysenko.

“The ratio of household deposits to GDP in Russia is less than
20%. Even in Serbia it is 40% and in countries like Hungary and
Poland, it is 80%-90%. We have a lot of potential.”

Vladimir Evtushenkov was born on September 25, 1948 in the Smolensk
region [Смоленская область].

He graduated from the D. Mendeleev Moscow Chemical Engineering
Institute in 1973 and in 1980 from the School of Economics of the Moscow
State University where he earned a Doctorate in Economics.

From 1975 to 1982, Mr. Evtushenkov worked as shop superintendent, Deputy
Director and Chief Engineer at the Karacharovo Plastics Works. From 1982
until 1987 he was Chief Engineer and subsequently first Deputy General
Director of the Polymerbyt Scientific and Production Association. He was
appointed head of the Technical Administration of the Moscow City
Executive Committee in 1987 and in 1988 became head of the Central
Administration on Science and Engineering of the Moscow City Executive
Committee. In 1990 Mr. Evtushenkov moved to chair the Moscow City
Committee on Science and Engineering.

He has been a member of the Bureau of the Board of Directors of the
Russian Union of Industrialists and Entrepreneurs since 2000. In 2001,
he became head of the Union’s Committee on industrial Policy. He has
been a member of the Board of Directors of the Russian Chamber of
Commerce and Industry since 2002. Mr. Evtushenkov is also a member of
the Government Commission on Science and Innovation Policy and a member
of the Council on Science and High Technologies with the President of
the Russian Federation and the National Council on Corporate Management.
In March 2004, he was elected Chairman of the Council of Trustees of the
Development Fund for the State Russian Museum [Русский музей] "Friends of Russian
Museum" [Друзья Русского музея]. "

In a previous issue we
dwelled at length on the background of a discreet oligarch,
Suleiman Kerimov [Сулейман Абусаидович Керимов], a 39-year-old legislator in the federal
Duma and owner of the Nafta Moskva company [нафта Москва]
(RI N°14).

Born in Dagestan [Дагестан],
the self-effacing Kerimov was already one of the biggest
individual shareholders in Gazprom [Газпром] with a 2.3%
stake. In recent weeks he doubled his holding to 4.5%, which
probably makes him the leading stakeholder in the gas giant. The
holding will probably be worth a lot of money when Gazprom
starts offering equity to foreign investors, a move all but sure
to drive up the price of its shares.

But Kerimov doesn’t
show any sign of stopping there. Some Russian financial sources
indicate he recently laid out $900 million to acquire the
Polymetal [Полиметалл] mining company which owns gold and silver
mines. If that sale did take place (for the moment neither
Kerimov nor Polymetal have confirmed it) the transaction
is interesting from a number of standpoints. Polymetal, which
has been controlled up to now by St. Petersburg interests headed
by Alexande Nesis , is the second biggest Russian gold
producer after Polyus, affiliate of Vladimir Potanin’s [Владимир Потанин]
Norilsk Nickel group [Норильский никель].

The gold mining
industry is the scene of a lot of manoeuvring at present in view
of Russia’s large reserves of the metal (RI N° 18). Many
foreign mining groups are lying in wait, such as Barrick Gold
and AngloGold, even though outsiders have had a rough
ride in Russia in recent years. The arrival of a n ew kid on the
block in the person of Kerimov confirms that Russian investors
who had stood aloof from the industry up to now are also taking
an interest, probably with a v i ew to the sale of the Sukhoi
Log [Сухой Лог] deposit, the biggest ever discovered in
Russia.

Kerimov is linked to
Mikhail Gutseriev [Михаил Сафарбекович Гуцериев, geb. 1958],
a 47-year-old who had long operated in Chechnya [Russian:
Чеченская Республика);
Chechen: Нохчийн Республика] and Ingushetia [Russian:
Респу́блика Ингуше́тия;
Ingush: ГIалгIай Мохк)], served as president of Slavneft [Славнефть] and
now owns the Russneft [РуссНефть] company and the BIN Bank
[БИНБАНК].

He is also said to be
on good terms with Igor Shuvalov [Игорь Иванович Шувалов],
deputy chief of the presidential administration (their dachas
[дача] are a stone’s throw from one another). As a result,
Kerimov is the man to watch in times ahead."

"Yuri Mikhailovich Luzhkov (Юрий Михайлович Лужков) (born
September 21, 1936 in Moscow [Москва], Russia, USSR) is a Russian
political figure. He has served as mayor of Moscow since 1992.

Family

His father, Mikhail Andreyevich Luzhkov, was a woodworker who
moved to Moscow [Москва] from a small village in Tver
Oblast [Тверская область] in the 1930s. His
mother Anna Petrovna was originally from Bashkiria [Башкирия;
Башҡортостан
Республикаһы].

Professional career

From 1953 to 1958, Luzhkov studied at
the
Gubkin Moscow Petrochemical & Gas Industry Institute. From 1958 until 1964,
he worked as a scientific researcher in the
Moscow Scientific Research Institute of Plastics. He joined the
Communist Party of the Soviet Union (CPSU [КПСС]) in 1968. For the next 20 years
he worked on automation initiatives in various sectors of the
chemical industry (1964-1971: management automation department chief,
State Chemistry Committee; 1971-1974: automated management systems
department chief, Chemical Industry Ministry of the Soviet Union;
1974-1980: CEO, Experimental Design Office of Automation, Chemical
Industry Ministry of the Soviet Union; 1980-1986: CEO,
Scientific-Industrial Association "Petrochemautomation".)

Political career

He was first appointed as a member of the
Moscow city council (Mossovet) in 1977, and in 1987 transferred to
the executive branch of the Moscow city government (Mosgorispolkom).
He held different positions, usually one level below the Mayor. In
1991,
Gavriil Popov was elected Mayor of Moscow in the first open free elections.
However, Popov was not an experienced administrator, but rather an
university professor whose popularity stemmed from his pro-democracy
speeches and articles. Popov was overwhelmed by the responsibilities
of office and resigned in June 1992. Luzhkov, who held the position
of Chairman of the Moscow city government at the time, was appointed
Mayor by Boris
Yeltsin [Борис Николаевич Ельцин] on June 6, 1992. Luzhkov proved more skilled
at managing the city than Popov, which earned him wide popular
support among Muscovites. He was first elected as Mayor on June 16, 1996
(winning 95% of the vote), and re-elected on December
19, 1999 (69.9% of the votes) and again on December 7, 2003 (75% of the votes).

In 1998, as Boris
Yeltsin's political troubles grew, Luzhkov formed his own national political
faction,
Otechestvo [Отечество] (Fatherland), to serve as his base for the upcoming
presidential election. Otechestvo had the support of many powerful
regional politicians, and its apparent supremacy was sealed when it
merged with another party,
Vsya Rossiya [Вся Россия] (All Russia) to form
Otechestvo-Vsya Rossiya. Luzhkov and his new ally, former prime minister
Yevgeniy Primakov [Евгений Максимович Примаков], seemed likely to displace both
Yeltsin and his inner circle in the parliamentary and presidential
elections due to be held in late 1999 and mid-2000, respectively.

However, Luzhkov's fortunes turned when Boris
Yeltsin appointed
Vladimir Putin [Владимир Владимирович Путин] as Chairman of the Russian
Government (predsedatel', or prime minister) in August 1999. While
virtually an unknown when first appointed, Putin rapidly gained
popular support thanks to a hard-line law and order image and the
backing of powerful state-owned and state-allied media and economic
interests. The hard-fought autumn 1999 Duma campaign inflicted a
fatal blow against his larger political ambitions. So battered was
Luzhkov's political capital that
Otechestvo-Vsya Rossiya ended up endorsing Putin in the 2000 presidential
elections, which he won easily. After this crushing defeat, Luzhkov
became less active in federal politics.

Registration controversy

In the Soviet
Union every citizen required permission to settle in certain urban areas, such
as Moscow, as the government wanted to limit the inflow into the big
cities. The post-Soviet
Russian constitution granted every Russian citizen freedom of movement. However,
Luzhkov has restricted this right by maintaining an unconstitutional
registration process. His rationale has been that Moscow's city
infrastructure could not handle a rapidly growing population. Under
Luzhkov's registration regime, unregistered residents have trouble
getting legal employment and are regularly harassed by the police.
Some of the most blatant limitations were removed by the Supreme
Court and the Constitutional Court after a long fight with Luzhkov's
lawyers, making the registration process somewhat simpler. Now a
person can spend 90 days in Moscow without any registration.

Luzhkov was frequently accused of being too close to major
businessmen, including billionaires
Vladimir Gusinsky [Владимир Гусинский] and
Vladimir Yevtushenkov [Владимир Петрович Евтушенков], and for conducting
allegedly suspicious privatization deals for formerly city-owned
property. Russian and foreign press have claimed that Mr. Luzhkov's
wife
Yelena Baturina [Елена Николаевна Батурина] is a
billionaire, and have noted that the construction and furniture companies she
owns receive a large number of lucrative municipal contracts.
However, Luzhkov has never been charged with any corruption-related
offences.

Personal

Luzhkov married his first wife, Marina Bashilova [Марина
Башилова], in 1958, and had two sons with her, Mikhail and
Aleksandr. Bashilova died from liver cancer in 1989. He married his
second wife,
Yelena Baturina [Елена Николаевна Батурина] in 1991. They have two daughters,
Alyona (born 1992) and Olga (born 1994). Luzhkov frequently appears
in public at different festivals and celebrations, and is an
enthusiastic promoter of the city. His hobbies include tennis and
apiary. His views on physical fitness are well known, with a statue
of the mayor in tennis garb being erected recently in a Moscow
park."

"Grigori Loutchansky [Григорий Эммануилович Лучанский].
Born in 1945. Student company commander in Latvia [Latvijas]. Leader
of the Central Committee for the Young Communist League Department.
Chairman of the Revision Commission for the Young Communist League
of Latvia. Deputy Dean at the University of Latvia – the youngest
deputy dean in the Soviet Union. He has a Phd in economics. Arrested
in 1982. In 1983 sentenced to 7 years in prison for stealing
furniture, four settees, a telephone and other Soviet property.
Place of imprisonment – a prison in Jelgava, Latvia, or else – in
Solikamsk [Соликамск], far north Russia. Director of the
communications department in the Adazi [Ādaži] agro-company.
Between 1989 and 1995 founder, owner of Nordex in Vienna.
Recorded in the Guinness Book of Records as the fastest get-rich
businessman. In 1993 he met with Bill Clinton, President of the USA.
In 1994 the government of Great Britain bars entry into the country.
In 1995 to 1997 he was a student of Israeli multimillionaire Shaul
Aisenberg [Eisenberg] in Kazakhstan and China. Founder of a center
for investment programs and projects, dealing with especially large
investment projects in Eurasia."

A graduate from the Tashkent [تاشکند] State University, he
speaks fluent Arab and English. After the university, Makhmudov
worked within the framework of the Ministry of Foreign Economic
Contacts of the USSR. He was a translator to Soviet military
advisors and specialists in Libya [ليبيا,] between 1984 and 1986
(Makhmudov was assigned to the Main Engineering Directorate, an
analog of Rosvooruzhenie) and to Soviet military advisors in
Iraq [العراق] between 1986 and 1988 (assigned to the Directorate
of Military Construction of the Iraqi General Staff). There is
the widespread opinion that positions like that are only
reserved for whoever is KGB.

Makhmudov worked for Uzbekintorg between 1988 and 1990. In 1996,
he became general director of the Gai ore mining and processing
enterprise in the Urals.

In 1999, Makhmudov with partners established the Urals Ore and
Metals, a company he remains the president of even now. The list
of his business partners and cronies is believed to include Oleg
Deripaska [Олег Владимирович Дерипаска]
(Russian Aluminium, Basic Element), Alexander Abramov [Александр
Григорьевич Абрамов] (formerly TWG top manager, owner of
Eurazholding, and West-Siberian and Kuznetsk metal combines),
Alexander Mamut [Александр Леонидович Мамут], Mikhail Chernoy [Михаил Черной]
(TWG co-founder), Vladimir Lisin [Владимир Сергеевич Лисин] (formerly
TWG top manager, owner of the Novolipetsk Metal Combine).

There is no saying at this point in what capacity Makhmudov will
return to Uzbekistan - as an advisor or actual politician. In
any case, appearance of such a figure known to have pipelines
into upper echelons of state power and businesses in Russia will
mean economic rapprochement between Uzbekistan and Russia.

Tadschikistan-Bezug

In fact, this whole hypothesis certainly rings a
bell because Russian businesses are actively expanding into
Central Asia nowadays. Deripaska [Олег Владимирович Дерипаска],
for example, intends to invest almost $800 million in completion
of construction of the Rogun Hydroelectric Power Plant in
Tajikistan [Тоҷикистон] and in modernization of the Tajik
Aluminium Factory. It will be followed by another major project
- construction of an aluminium plant in Dangar, President
Emomali Rakhmonov's [Эмомалӣ Раҳмонов] native town."

Received an MBA degree in 2001 in Northumbia University Business
School (Newcastle, Great Britain).

Upon graduation in 1988 Aleksey Mordashov worked at the
Cherepovetskiy Metallurgical Plant [Череповецкий металлургический
комбинат] (since 1993 – JSC Severstal [ОАО «Северсталь»]) as senior
economist, head of the bureau of economics and labour organization
of the service-mechanical mill №1, and as deputy head of planning
department.

Österreich-Bezug

In 1990 he had a traineeship in Voest Alpine – a metallurgic
company in Austria.

In 1992 Aleksey Mordashov was appointed financial and economical
director of JSC Severstal, becoming the youngest director in the
enterprise’s history. In April 1996 he became the CEO of JSC
Severstal.

Abb.: Walzstraße bei Severstal
(Pressefoto Severstal)

In 2002 during the restructuring Severstal’s business he was
appointed CEO of Severstal-Group. He is also the chairman of the
board of directors in JSC Severstal, JSC Severstal-Auto [Северсталь-Авто],
and JSC Severstal-Resource [Северсталь-ресурс].

Since November 2000 he is a member of the Presidium and Bureau of
Board of the Russian Union of Industrialists and Enterpreuners (RSPP
[РСПП]), since March 2001 he is the head of the RSPP workgroup
responsible for Russia’s joining the WTO and reforming the customs
policy. Since April 2002 Aleksey Mordashov is a member of the
Russian-German workgroup responsible for strategic economic and
financial questions. Since May 2003 he is a member of the
Enterpreneurs Council of the Government of the Russian Federation.

Aleksey Mordashov was recognized as the most professional federal
level manager by the «Expert RA» rating agency. He also became the
winner in the nomination «Municipal activity in the enterprise
sphere» in the «Enterpreuner of the Year 2003» contest held by
Ernst&Young. In 2003 Business Week included Aleksey Mordashov into
the top 25 list of prominent European managers, enterpreuners,
economists, politicians, and innovators in the top managers category.

Aleksey Mordashov was awarded the Order of Service for Motherland
[За заслуги перед Отечеством] 1st (1999) and 2nd degree and the
Russian Orthodox Church Order of St Blessed Prince Daniil of Moscow
[Святого благоверного князя Даниила Московского] 3rd (2003).

He is an honorary doctor of the Saint-Petersburg State
Engineering-Economical University [Санкт-Петербургский
Государственный Инженерно-Экономический Университет] (May 2001) and
of the Northumbria University (July 2003).

Born: January 3, 1961Office: President of the InterRos
Holding Company [Интеррос]

Abb.:
®Logo

Estimated worth: US$ 5.4 billion

Vladimir Potanin, 43, was born into a high-ranking
Communist official’s family. He attended the Moscow Institute for
International Relations, an elite school that groomed students for
diplomatic service, the KGB, and offices of the Kremlin. He then
went to work for the Soviet Department of Trade, where his father
had also worked.

In 1991, Potanin created InterRos Holding Company
[Интеррос], a foreign trade
association that traded nonferrous metals, including aluminum,
copper, and lead. With the capital that he accumulated from InterRos,
he founded two banks, the Oneximbank [ОНЕКСИМ банк] and the MFK [МФК], to which many
state enterprises transferred their accounts. Later, Potanin became
one of the principal authors of the Loans for Shares program, in
which the Russian government traded ownership in state industries
for loans. The controversial program was administered through
auctions, but only select bidders were invited to attend, usually at
the discretion of President Boris Yeltsin’s daughter [Tatjana Djatschenko
— Татьяна Борисовна
Дьяченко]. Vladimir
Potanin was among the invited bidders. During Russia’s transition to
a market economy, he acquired control of more than 20 formerly
state-owned enterprises.

To improve his image in the West, Vladimir Potanin became a leading
donor to the Guggenheim Foundation. He gives more than $1 million
annually and has a seat on the board of trustees of the Guggenheim
Museum. Potanin also established a charity fund in Russia which
implements projects in the field of education and participates in
The Greater Hermitage Project. The fund’s scholarship program for
talented students involves over 1,700 students from 60 leading
Russian state higher educational institutions. In May 2002, Mr.
Potanin donated personal funds for the purchase, by the Russian
Ministry of Culture, of the famous Malevich painting The Black
Square. The masterpiece was included State Hermitage’s permanent
display.

Vladimir Potanin is a member of the Board of the Russian Union of
Industrialists and Entrepreneurs and of the Russian Federation
Governmental Council on Entrepreneurship. He maintains a stable
position among the top 10 most influential Russian businessmen and
is one of the few major oligarchs whose actions have not been
subject to the Prosecutor’s Office scrutiny in the past
few years.

Vladimir Potanin (Владимир Потанин in
Russian) (born in 1961), president and founder of
Oneximbank (also
Oneksimbank) [ОНЕКСИМ банк]. He is the owner of the Norilsk nickel-mining
complex [Норильский никель],
and widely considered one of the leading
Business oligarchs in Russia.

Vladimir Potanin was born in 1961 into a
high-ranking Communist family. He attended the Moscow Institute for
International Relations, an elite school that groomed students for
the KGB and offices of the Kremlin. He then went to work for the
Soviet Department of Trade, where his father had also worked. In
1991, he created Interros [Интеррос],
a foreign trade association that traded nonferrous metals, including
aluminum, copper and lead. With the capital he accumulated from
Interros, he started two banks, the Oneximbank and the MFK [МФК], to
which many state enterprises transferred their accounts. Interros
was a principal player in exchanging soft currency roubles for
dollars, operations made possible by Potanin's government
connections.

Later, Potanin became one of the principal authors of the Loans
for Shares program, in which the Russian government traded ownership
in state industries for loans. The controversial program was
administered through auctions, but only select bidders were invited
to attend, usually at the discretion of President Boris Yeltsin's
daughter [Tatjana Djatschenko — Татьяна Борисовна
Дьяченко]. Potanin was among the
invited bidders. During Russia's transition to a market economy, he
acquired control of more than 20 formerly state-owned enterprises.
Potanin's business empire was considerably dented by Russia's 1998
economic crisis, but he managed to set up numerous companies to
shelter his personal assets. Some speculate that he diverted
considerable sums to his accounts outside of Russia. He reportedly
threw a party at the height of the crash for more than 100 of his
closest friends in a nightclub at the French ski resort Courchevel
1850.

Potanin is a controversial figure. He is one of the lower profile
oligarchs, although he has appearantly changed his mind in recent
years (he gave a candid interview to PBS for their 2002
documentary ,Commanding Heights). While he has amassed a personal fortune,
he has also contributed significantly to the advancement of Russian
society and the development of Russian industry."

INTERVIEWER: When was it that you decided to become a businessman, and how
did that inspiration come about?

VLADIMIR POTANIN [Владимир Потанин]: Frankly speaking, I decided
to become a businessman at the moment when I understood that it
is possible, because I grew up in a country where it was not
possible. There existed even a special article in the penal code
of the Soviet Union which punished entrepreneurial activity. At
the end of Gorbachev's time, it became clear that it was
possible to make your own business, to create joint ventures
with foreigners, and to open your own companies. I decided to
try myself, in this field.

In that time, I worked in the Ministry of
Foreign Trade. In order to make something new and launch a new
business, you should have a certain entrepreneurial drive, but
also you should be prepared for this, and I had a certain
advantage. Some say I had, for example, good links with the
minister. Maybe that was the case, but the most important thing
was that my father worked also at the same ministry, and I
traveled a lot with him abroad. I saw a lot of foreigners, I
spoke to them, and I saw foreign television. I knew from the
very beginning, from childhood, that there were two points of
view, and I had the ability to compare [them]. Despite the fact
that I believed that everything which was done in our country at
that time was right and I honestly tried to work within these
conditions, I had the ability to compare, and when capitalism
came to this country, when the openness came, I was maybe a
little bit more prepared than my colleagues.

INTERVIEWER: At the time, did you think that
the Soviet Union would be able to evolve socialism, or did you feel
that it was finished and it was just a matter of time until full
capitalism arrived?

VLADIMIR POTANIN: Now it's easy to say. At
that time, nobody knew exactly. I mean, it was difficult to
understand what was going wrong, but I felt that something was
wrong; something was inefficient. And I tried to understand the
reasons for that. At that time, it was the level of intuition. I
always tried to start to organize things, and I always thought
that it was easier for me to organize something than to execute
some possibly interesting but very particular job. I always said
to my bosses, "Look, pay me the same salary, but give me the
possibility to make decisions, to do something, because I'm more
efficient than this." No problem. People who are not likely to
take the responsibility, if they are experienced and they are
good, just pay them, let's say, the same big salary, but let's
do it in a more efficient way.

Now I understand the reason for the
inefficiency of our society under the Soviet Union, and I think
that there were two major reasons. First of all, the lack of
respect for human qualities, for leadership, for the possibility
of the person to do something, and no stimulation, no
recompensation for a good job, no, let's say, real guarantee
that if you are smart and energetic, you are going to be
successful. The second thing was the absence of private property,
which removes the stimulus for people. It doesn't stimulate
investments; it doesn't stimulate long-term plans for the family,
for the future, because you can leave nothing to your children
or grandchildren. That's why you live like everything is
temporary, and when people educated under such circumstances
come to power, they also feel that everything is very temporary.
That is why it is very difficult to create something really
stable with a long-term perspective and with good traditions.

INTERVIEWER: So when you decided to become a
businessman, what did you do? I think I read that you started
Interros [Интеррос] with $10,000.

VLADIMIR POTANIN: Yes, that's true. I had a
certain choice. Of course, I wanted from the very beginning to
be free in my decisions, especially after several years of
working under circumstances where you are not really allowed to
get a chance to do a lot of things on your own. But on the other
hand, I did not like to start with something unclear, small,
without any concept of development, et cetera. I had the
possibility of starting in 1988 or 1987. But I started in 1990;
I was trying to prepare myself to understand what kind of
concept of development I would like to have. And then I created
a small foreign trade association with the equivalent of
$10,000. After I met my partner, Mr. Protherow, we decided to
start a banking project, and at the same time we started to
think already about a business on a bigger scale. At the very
beginning we thought more about gaining money, to have a normal
life with our families, etc. Then we wanted a certain freedom in
our actions, in our decisions. After we managed to create our
first small bank, we understood that we had a good prospect to
develop because highly qualified services are required in all
spheres of activity - in finance, in industrial management, in
everything.

INTERVIEWER: Did you find the business
environment in those early years easy to work in? Did you find it
easy to find qualified staff, people you could trust, and people who
were able to work efficiently?

VLADIMIR POTANIN: It was extremely
difficult to find people who could work efficiently, because
nobody knew about the market conditions. There was no experience
at all. A big tragedy of our time, for Russia, was that there
was no link between the elder generations and our generation. It
was very bad, because during a two- or three-year period, the
whole generation of people from the age of 50 to 70, people who
could work, who should work, and who should share their
experience with us, they disappeared immediately from active
business life. That was a big problem for us. We made our own
mistakes, and it was very painful. When people say now, "Look,
you did such a thing and such a thing in the wrong way," they
are right. But please understand that it was extremely difficult
to find the way with no piece of advice from anybody. For me, my
father was, and still is, a symbol of qualified persons in the
Ministry of Foreign Trade under Soviet conditions. He was my
teacher under that time. I could ask him questions and receive a
lot of explanations. I thought I was prepared, maybe better than
anyone else, for this kind of job in an international
environment. But after 1990, he could not help me because he was
not experienced at all in this field. Even for younger people it
was easier because they have more energy; they have all their
whole life in front of them. For those who are above 50, 55,
above 60, it was like the finish of their whole active life.

The Radical Economic Reforms of 1991 and 1992: Potanin's Reaction

INTERVIEWER: What was your impression, at
the time, of the radical reforms that Gaidar brought in, the shock
therapy? Were you cheering from the sidelines, saying, "This is the
way that we can go forward"? What was your thought at the time?

VLADIMIR POTANIN: Again, we should realize
that the situation at that time was very difficult for those who
started the reforms. First of all, in spite of the fact that
Yeltsin won the first elections, Russia stopped being a
communist country, etc., we must understand that the political
support for changes, for reforms, was not strong enough. And
after one year of reform, the government and even the president
had lost almost all support from the society, almost all the
confidence of the people. It was a huge problem. Of course there
were certain mistakes, and maybe now we can understand that some
things could have been done in another way, but the situation
was that somebody should take responsibility, and I don't think
that it was possible to avoid mistakes. From time to time, the
situation in Russia is compared to the situation in the United
States at the beginning of the century, or to other countries
developing a democratic system. I partly share this point of
view; it could be compared, but it's a different thing to
undertake drastic changes in a whole society. Now everything is
going faster, and that's why the reformers in Russia at the
beginning of the '90s had to be more active, take more
responsibility, and move more quickly than 50 or 80 years ago.

INTERVIEWER: On that point about 19th-century
America and the great American industrial empires that were built at
that time, when you started out, or even today, did you have a
vision of your own role in Russian industry? Who were your models,
people like J.P. Morgan and Rockefeller in the States?

VLADIMIR POTANIN: Everybody starts with
creating or acquiring certain property in order to create the
material to work with. When we started our business, we thought
first of all about development, how to grow, and we managed to
do this, even with all the difficulties and all the difficult
rules that were implemented in Russia at that time. But now we
understand that the only way to develop our businesses is to be
integrated in the international market. It's the same thing for
the whole economy of

Russia. I don't see our future as a country
without integration in the international economic society. I'm
not speaking about cultural, political views. I'm saying that we
should be part of the international market, let's say, club, and
to do so we must change a lot of things. We're trying to do this
more or less successfully. We must change a lot of things on the
level of the country, change legislation and establish certain
traditions, have more transparency, etc., but we should also do
the same thing on the level of companies. Several years ago, we
didn't even think about what we are trying to do now, like
corporate governance for example, certain corporate ethics, if
you want. If we had started to think about the right methods of
entrepreneurial activities, let's say five years ago, started to
think that this is important, that acquisitions and growth are
not everything. We also realize that we all must also know how
to manage this and how to implement the right standards in our
businesses. Back then, we bypassed such things as transparency
and the development of relations with foreign partners. Now,
eight years after we've started our business, we think not only
about corporate governance, but corporate traditions, corporate
ethical rules, etc., which is interesting for us, and we like
this style.

Gaining Control of Norilsk Nickel [Норильский никель]

INTERVIEWER: How did you become interested in Norilsk Nickel?
What was it that initially sparked your interest in it?

VLADIMIR POTANIN: Well, we first started to
work with Norilsk Nickel when Nickel became a client of our bank.
Our first knowledge about Norilsk came from that time. Working
with them on a purely financial basis, we understood a lot of
things. First of all, that the company was mismanaged. The
financial problems they had were coming not because of the
absence of prospects for the plant, but because of wrong methods
of management. Maybe [it was] at that time that we understood
that we could offer better management. We started to think for
the first time about this possibility, because normally, up
until then, we were never involved with the so-called real
sector of the Russian economy, which means in the industrial,
producing companies. It was assumed that we could not understand
how to be a director of a big plant, for example. But when we
saw how it works, when we saw the internal, let's say, kitchen
of management in Norilsk, we understood that it could be done
much better and much more efficiently. We saw that we could find
better methods, better specialists to do that, and we started to
think about it. And when we understood that we were ready for
this kind of expansion into industry, we made a strategic
decision to invest the money of our group in the industrial [sector],
and we bought Norilsk Nickel and some other important industrial
assets and started to restructure them.

Abb.: Palladium von Norilsk Nickel
(Pressefoto Norilsk Nickel)

INTERVIEWER: When you started thinking about
acquiring it, I read that you talked to other businessmen who also
had some considerable influence and, presenting a united front, made
a proposal to the government. In those early days, how did that
actually work? Were you talking to other businessmen like yourself?

VLADIMIR POTANIN: It worked the following
way. By 1995, we already had a certain new business elite of
managers and owners who, in my opinion, were efficient owners
and qualified managers. But the interesting thing is that the
distribution of property in the country was still in favor of
the so-called Red Directors, because when the privatization
started, in the first stage, all property came into the hands of
the old managers, the so-called Red Directors, and it was clear
that with their methods of management and their mentality, it
would be very difficult to restructure the economy and to go
forward with an integration into the international economy. So
those who were efficient, who made their first money on
financial operations, on trading operations, they were prepared
to assume big management projects, but they had no property in
their hands. That's why it was a certain struggle between the
old nomenklatura and the new elite. And this struggle was
different from struggles that have taken place in Europe or in
the United States, because of lack of legislation and of other
different things. The new businessmen were also, let's say, not
angels. Anyway, generally speaking, without details, it was a
struggle between the old Red Directors and old Communist Party,
nomenklatura, and the new managers who had gained their money
themselves under different and difficult rules, but by
themselves. And as you can see now, the struggle was won by us,
by those who were younger, who were more active and more
prepared for competition.

Abb.: Tellur aus Norilsk Nickel
(Pressefoto Norilsk Nickel)

INTERVIEWER: With Norilsk in particular, I
understand Anatoly Filatov was quite an important figure in the
Soviet industry, and Norilsk was a real prize. But what made you
think, as a young guy, that you could actually take on someone like
that and win?

VLADIMIR POTANIN: That's exactly what we
thought from the very beginning. There was a certain big respect
for the so-called Red Directors because they really were big
figures in public opinion, and we understood that we were
leading something very big and important. And, you know, the
openness is a very good thing when you do not know about the
plant or the event or anything you cannot judge, and it seems to
you like something that you could never understand. But when you
start to understand what is inside, when you start to understand,
as I said, the kitchen of making decisions, you start to
understand that Filatov is a big guy, but he makes wrong things,
and even if he did a very great job 10 years before, it doesn't
mean that he can continue to do the right job. The conditions
changed after the collapse of the Soviet Union, and he and his
team were not prepared for the new conditions.

The methods of management which they had
had spoiled the whole situation for Norilsk. 1994 was the worst
year for Norilsk, the complete collapse. Only after three years,
after we came to the plant, we managed to change the situation
for the better. But our understanding that we could do this came
from the analysis of what Filatov was doing. He was very great
and big only on television or in an official atmosphere. When
you know what he was doing in reality, you start to analyze your
own possibilities and you start to believe in yourself.

Convincing Chubais [Анатолий Чубайс]

INTERVIEWER: When you took your idea that you had discussed with
other businessmen, which eventually became known as loans-for-shares,
to [Anatoly] Chubais, the deputy prime minister, I understand that
at first he was skeptical and thought this wasn't the way he
envisioned privatization. How did you bring him around to your way?

VLADIMIR POTANIN: Well, first of all, I
came to Chubais with another idea. I told him to look, there is
a large number of new businessmen who were ready to lead a
really big project, and why do you leave the big state-owned
properties in the hands of the Red Directors? Give the
management to these entrepreneurs. Make some kind of auction for
these [assets]. Let's make this move. The first stage of
privatization led to the appearance of private property in the
country, which was very good, because without private property
it is not possible to develop market reforms. But this property
was in the hands of inefficient owners. I proposed to Chubais to
move the management of this property that was still state-owned
to new businessmen. But politically it was very difficult, and
afterward I understood why it was so difficult for Chubais, even
if he agreed, generally speaking, with the idea that the
management of this property was not as efficient as it should be.
It was politically very difficult to withdraw this power from
the Red Directors. It was not only the new businessmen who were
not strong enough to struggle against Red Directors, but even
the government and even Chubais were not strong enough to easily
win this struggle. That's why the second idea, after I
understood that the first one was very difficult to implement,
was to sell this property. The initial idea of loans-for-shares
auctions were proposed as a relatively transparent scheme with
access for foreign investors. After a big struggle in the
government, with the Red Directors, the property was transferred
under a scheme which was, let's say, purely Russian. We were not
against, from the beginning, the open auctions, to try to
compete there.

We understood that the foreigners were not
active enough, and were not prepared to invest before the second
election of Mr. Yeltsin [Борис Николаевич Ельцин]i n 1996. We
were ready to compete. But the problem was that the Red
Directors were not prepared to compete, so they tried move the
match, move the struggle to the territory of untransparent rules,
where they considered they were stronger. But they were mistaken.
We proved that we were more efficient even under such rules. And
now, when I hear certain criticism from Western communities that
the rules of this struggle were not transparent, I say, "Yes,
they were not transparent, but they were rules which we were
forced to play [by] because it was a struggle, not with foreign
businessmen, it was a struggle with our Red Directors, and it
was a struggle on their territory." And I remind everybody who
is interested in this question that it was a game on their field.
We played under their rules, and we won at their home. And now
what we say is we are trying to invite everybody to play on our
field, and now we are ready to respond to all kinds of criticism.
But what we're doing now is not what we were forced to do before.

Abb.: Kobalt aus Norilsk Nickel
(Pressefoto Norilsk Nickel)

The Transfer to Democracy

INTERVIEWER: At the time before the
presidential election, the political situation here was very
volatile. Did you find that that was in the mind of Chubais and
other people close to Yeltsin that yes, in fact, we need to support
loans-for-shares? Was that really one of the driving forces in your
thinking and the thinking of other businessmen, that you'd had to
move quickly to start the economies?

VLADIMIR POTANIN: Well, I think that this
reason existed, of course, because the decision was whether
Russia will go toward the international society or [if] it will
come back to the Communists. There was not only a question of
political motives, but also there was a question of creating a
group of supporters. Unfortunately it's very difficult to
artificially create a wide group of supporters. And
loan-for-shares, from a political point of view, could be
considered an attempt to create a group of supporters who are
for reforms, who are owners, who are supposed to be efficient
owners. Of course it helped, the creation of owners of big
industry, [owners] who have real influence on the economic
development of the country; owners who have the mentality I
described that is open to market reform and to international
society and to democratic principles of life. It was, of course,
very important. We can say that it was artificial. Yes, it was
cheap, relatively cheap; it was not transparent, yes. But I
think that it was difficult to avoid during this period that
some should become big and important. And whether it was fair or
unfair, we could use different methods of [measuring] this, but
if these owners are efficient, if they manage now to deal with
the problems of their enterprises, why not? I mean, maybe it was
really the only way. Who knows now? But it was done, and,
generally speaking, it was for the better.

And the support of Yeltsin, it was not just
the choice between Zyuganov [Геннадий Андреевич Зюганов] and
communism and Yeltsin and let's say his personality. I think
that we should assume that Yeltsin was really a big democrat,
and he really believed that the democratic way of development of
Russia is a good way. He honestly believed in this, despite all
the things that happened, and he had a lot of possibilities to
show that he didn't want what it is, but he didn't. Everything
he did proved that he is a democrat inside himself. And this was
very important for our country, because when you pass very
quickly from communism to a new era where democratic rules and
traditions are very vulnerable, you must have a leader who is
democratic inside himself. And Yeltsin was democratic. Look now
at what has gone on in Yugoslavia. Milosevic was not prepared to
respect the result of elections, and they created what's a
really bad situation, a conflict situation. And Yeltsin, being a
real democrat, despite the fact that everybody thought that
maybe he would try to stay in power, he left the position. That,
maybe, was the strongest move on his part during his whole life.
He created the precedent of a normal transfer of power in Russia,
and maybe after 10 or 20 or 50 years, we will remember this as
the first precedent of nonrevolutionary transferral of power to
a successor. That's very important.

Norilsk Nickel [Норильский никель]: Difficulties and Accomplishments

INTERVIEWER: When you were talking about
going up against the Red Directors on their terms, as a young man
against these titans of industry, and then winning on their terms,
what did that feel like to win?

VLADIMIR POTANIN: First of all, it gave a
great feeling of victory, because several years before, it was
even difficult to think about struggling against such big
figures like the Red Directors. And it was, if you want, some
kind of pride that the young generation can compete. Many years
later, it became a feeling of a great responsibility, because
when you win, when you acquire something, when you come
somewhere, you become responsible for everything that is going
on. But that came a little bit later.

Abb.: Kirche in Norilsk
(Pressefoto Norilsk Nickel)

INTERVIEWER: When you first went to Norilsk,
after you were victorious, when was that? What was it like?

VLADIMIR POTANIN: Three years after --
let's say, one year after the victory, it was a difficult time.
I mean, it was just after a very difficult time because we came
to Norilsk when the situation was really very difficult. There
were a lot of debts, a reduction of production, no salaries for
five months, etc. And we started as managers with demonstrations
in the streets against us, because we hadn't paid the salaries,
etc., which means we started from a very negative point. One
year after, the situation changed already, and we had managed to
pay all the salary debt, we restructured old debts, and we
started a relatively successful crisis-management [process].
When I came for the first time, there was the feeling that
people were very, let's say, they were playing cool with me.
They were looking at me and trying to understand, because they
had had a very bad feeling from the very beginning. They had
some kind of hope, but it was very vulnerable. They tried to
understand whether they could believe or not. And each time when
I came to Norilsk, I felt the situation becoming warmer and
warmer step by step from their part, and now it's quite a
different situation.

Last February, I was ill, and I had a
really high temperature. My physician told me to stay in bed for
two weeks because it was really dangerous. And I said it was out
of the question, that I had to go to Norilsk because people were
waiting, and there was a program, and it's very important for
us. And I went to Norilsk. It was minus-40 degrees, and I had a
very hard program of meetings all day. And [when] I came back to
Moscow, I felt practically not ill at all. I mean, several days
of treatment, and that was all. That means it always gives me a
lot of energy to go to Norilsk, because I feel it is very
interesting. First of all, I see what we are trying to do, what
we have tried to implement, and it works. It exists. It works,
and it makes something. It makes something good, something
important. And the second thing is the confidence of the people.
When I come, I feel that people are asking me questions, and
they really see that we're together. And they believe. They
believe, and they are ready to share with me not only the plans
for the future, not only the promises of higher salary, but what
is important is that they are ready to share with me the
problems.

When we had problems this summer with the
idea to deprivatize Norilsk Nickel, when I came to Norilsk, I
felt a real support. It's not artificial or organized, but real
support from people who are really anxious about their destiny.
And I felt, maybe for the first time in my life with Norilsk,
that we have really the same destiny. And they understand that
we have the same destiny. They do not see me like an exploiter;
they see in me a partner. And together we're going to solve the
Norilsk problems. That was very important for me, and of course
I asked them to work and not to be involved in all, let's say,
political movements. But it was very important for me to know
that I have 100 percent at Norilsk. And when I came to President
Putin and said to him, "Look, I want this case to be considered
in a normal transparent way, under the law," he asked me whether
I was sure that I was right. I thought I remembered my meetings
in Norilsk; I remembered everything, and I said, "Yes, I'm
right." He said, "Okay, go and work." It was important for me.
It gave me the internal strength.

Abb.: Silbergranulat aus Norilsk Nickel
(Pressefoto Norilsk Nickel)

Russia Under Putin [Владимир
Владимирович Путин]

INTERVIEWER: So under President Putin now,
are you worried that there might be a move to renationalize Norilsk?
Based on your conversations with him, what do you think his vision
of the economic future of Russia is?

VLADIMIR POTANIN: I think that Putin really
believes that the only way for Russia is to join the
international society, to join with Europe and the international
society in terms of integration in the whole world system. And
my strong opinion is that Putin is very anxious about the
destiny of Russia, really anxious. He considers his post as not
an award, but a big responsibility. And he wants Russia to be
strong. But I'm 100 percent sure that he doesn't want to see
Russia strong in isolation, among some restricted, narrow circle
of countries or regimes or whatever. He wants a strong Russia in
the international society. He wants his country to be a player
in, let's say, the champion's league. He doesn't want to win in
small competitions. And that is very important. Therefore, I'm
not afraid that some nonliberal, undemocratic changes will take
place in Russia, because that's not the target of his presidency.

And as a personality, I also think that
he's not looking for quick and easy results. He really is ready
to work on problems, to solve them in reality and not just make
an artificial cover of the problem. That's why I think there's
no danger that Russia could change its movement to the
international society. On the contrary, with Putin, who is young,
of our generation, has a modern mentality, a certain openness, a
tolerance, and a 12- or 14-hour working day, it gives us a
certain hope that it will be quicker and less painful for the
country to make further movement toward the international
society. That's the general idea, in spite of that fact there is
a certain pressure, from time to time, on business and on
regional politics. It's inevitable.

Abb.: Präsident Putin in Norilsk Nickel
(Pressefoto Norilsk Nickel)

INTERVIEWER: Do you feel that you and the
other people who are called the oligarchs have the same political
influence under Putin that you had under Yeltsin?

VLADIMIR POTANIN: I think that it's not
possible to exert any influence on Putin. I think that even
people who are very close to him have only the right to be
listened to. Even those who are really close to Putin always say
that his decisions are unpredictable. And unpredictable doesn't
mean unprepared or impulsive. It means that it is very difficult
to influence and to predict what his reaction. And by the way, I
think that even Putin concentrates too much [on] certain
questions. It's very difficult for him, because he has the good
capacity to know a matter in detail. He doesn't like to make a
decision when he doesn't know the details. That's why when he
concentrates too much on each question and requires that it be
solved with his participation, it makes a big problem. I think
that in the future he must delegate more authority to his team.
At present, he has really a lot of headaches and problems to
solve. But influence, that's absolutely impossible.

And even with Yeltsin, by the way, it was
very difficult to make any kind of influence directly on him,
because he had a strong personality. But the difference is that,
in my opinion, a lot of decisions which were made by Yeltsin
were prepared artificially by restricting the generality of
information and by creating, let's say, a certain environment.
And this could affect a lot of particular decisions. As I told
you, Yeltsin was always a big democrat. That is why the major
decisions couldn't be changed, but the smaller particular
decisions in the economic sphere, in the questions handled by
staff people, in my opinion, they could be influenced. But with
Putin, as I said, forget about this. In my opinion it's
absolutely impossible.

Reacting to Criticisms of the New Russian Oligarchs

INTERVIEWER: What's your reaction to the
criticism directed at you and the other oligarchs? We talked about
transparency and the need to be a part of the global economy. What's
your reaction when you read criticisms of large Russian businesses
like Norilsk Nickel, and criticism of yourself, criticism that
asserts you're not playing by the same rules that are required to be
part of the global economy?

VLADIMIR POTANIN: There is criticism, and
there is criticism. When we're criticized for the things in
which we are really in the wrong, or not on time, or when people
are anxious because of the fact that they are prepared to work
with us but they do not understand our actions and they think
that we are doing something wrong, my reaction to that sort of
criticism is positive all the time. I will try to explain in my
position if I feel that I am right, but I'm ready to accept that
I'm wrong, and if I am, I will try to change what's wrong. This
is good, and we need this as a company. We need this as a
country. I think that it's a very wrong thing when people say do
not criticize us. That's not right. We must know what people are
thinking about us.

But on the other hand, there exists a
criticism that is connected, in my view, with wrong and unfair
opinions about Russia and about Russians, without understanding
of our history, without understanding about our situation,
forgetting that we are only 10 years into living in a democracy.
When I see this kind of criticism, which is quite negative and
unconstructive, and which is just explaining the absence of
desire in people to understand us and to live together with us,
of course I'm disappointed and it makes me sad. Frankly speaking,
from time to time it's even difficult to respond. But I think
that healthy criticism, which is inspired by the desire to see
Russia among other countries in the international community, and
the desire to see our companies, my companies, as part of the
whole system under transparent and normal rules, I welcome this.
And I'm trying to be very critical also toward myself. It's
always a question whether I am successful in this or not, but I
always am trying to make myself to be very attentive to this
kind of criticism.

Russia's Future as a Capitalist Country

INTERVIEWER: Looking back now, 10 years ago,
you were an official in the Ministry of Trade. Now you are a very
influential and successful businessman. Look toward the future
another 10, 20, 30 years. What do you think your role in the Russian
economy will be down the line? Will you be remembered like
Rockefeller or J.P. Morgan? And what kind of capitalism do you think
Russia will have down the road in the long term?

VLADIMIR POTANIN: For the time being,
there's a very big concentration of capital in our country,
which is historical. Even before the October Revolution we had
this in Russia, this high level of concentration of capital.
During socialism, we made a lot of monopolies, big plants,
exclusive plants that led toa high level of monopolization and
high-level concentrations of capital. That's why several
companies, several people leading these companies, are very
influential. If you take the 12 or 15 biggest companies in the
country, I think that they produce more than 50 percent of the
GNP, which is not good. Together with the fact that 90 percent
of GNP is being produced by so-called old business --
restructured, better managed, but old, old businesses -- and
only 10, maybe 15 percent of GNP is produced by what we call new
businesses created from nothing, it means that in order to have
a more competitive system, and a more transparent and more
market-oriented system, we need several things. First of all we
need to raise the portion of new businesses, of smaller and
average businesses, in the GNP, which will take place, I'm sure,
within five or 10 years, that percentage will grow. The
importance of big businessmen and the big businesses should be
less, and they should become more numerous. If we have 100 or
200 big companies it's one thing, but when we have 20 it's quite
another; the influence is bigger. We are starting to speak here
about oligarchs and influence on politics, etc. To a large
extent this is true, but this will change together with the
extension of business in Russia. Our role now, because we are
important from the point of view of Russian economy -- we are
producing 4.5 percent of GNP for example, Interros Group, which
is too much. I mean, our role is to produce this 4.5 percent
efficiently and to think about the social problems that we're
trying to solve, to have a certain social responsibility. As I
said, when we come somewhere, we're responsible for everything,
not only the profitability of the business. We are too big and
too important to think only about pure management; we should
also think about the environment. And now, when we are not
numerous, those of us who have a really big influence should use
that influence to create a new climate, more transparent and
more fair. We should accept the idea that we need to become more
numerous. We should invite people into the club, not to make
restrictions on them, but to invite them.

This is more or less going on now. Now all
businessmen are trying to create an organization where they all
are represented, an organization that doesn't serve the
interests of special groups, but is really for everybody, a
representative organization of businessmen. And people have
started to understand that the environment is no less important
than their own businesses, and they are starting to pay lot of
attention to this. This will make the situation in the economic
life of the country healthier. I think that our role is not to
stop this process. On the contrary, while we have the
instruments of influence, our role is to use them to create a
new atmosphere, in spite of the fact that our personal influence
will be lower. But it's a normal process, and we should work for
this. I think a lot of my colleagues really share this point of
view. Of course, there is a lack of confidence between us and
them. It's very difficult to leave some positions when you have
them. But it's important to understand that it's really
dangerous not to change the situation. It's really dangerous
when there's no environment. It makes the situation very
vulnerable when business is very nontransparent and public
opinion is very hostile towards businessmen. And that's also a
thing we think we should change. That's more or less what I
think about our role."

"However, the richest Russian
metallurgist and the second richest Russian resident by official
standards is Mikhail Prokhorov, general manager of Norilsk Nickel
Metallurgical Combine, who owns 28.87% of the company’s shares. He
was worth $1.162 billion in 2002 (the company’s capitalization as of
the end of December 2002 was $4.27 billion). Owing to the fact that
Nornikel’s capitalization nearly tripled in 2003 (to nearly $12
billion as of December 1), Mr. Prokhorov’s share capital reached
nearly $3.5 billion. His dividend earnings for all of 2002 were
$44.7 million; but in 2003, his earnings from interim dividend
payments for the first nine months alone will be $86.6 million. "

Mikhail Prokhorov [Михаил Дмитриевич Прохоров ], CEO of
Russian metals giant Norilsk Nickel, visited hunger-striking union
leaders on Monday, but said the firm's management would not yield to
pressure over a pay dispute, the company said. "The participants in
the action have been told that a hunger strike is not a method to
solve disputes, but is meant to exert pressure on the management," a
Norilsk Nickel spokesman said. "They have been told there will be no
concessions."

Union leaders at Norilsk's Arctic Division, which employs 60,000 and
hosts the firm's main mines and plants, last month threatened a
strike to press demands for more wages, more holiday and more
information including on managers' salaries. They started a hunger
strike on February 6 after more than two weeks of talks with
management brought no results, the Russia Journal reported."

Industry in Magnitogorsk [Магнитогорск]
centers around the worlds largest single steel milling and shaping
factory. The five mills at the plant produced the steel for half of
all of the Russian tanks during WWII. This historically military
emphasis is typical in the Stalin Era city and is commemorated in a
statue of the personified Soviet Worker handing the sword that he has forged to
the Soviet Soldier.

This legacy of steel manufacturing lives on today in the massive
amounts of raw steel, pig iron and finished products produced at the
Magnitogorsk Metal Works. In 1996 the factory produced 7.5 million
tons of steel, which is roughly equivalent to the entire steel
output of Great Britain or Canada. This feat is made even more
amazing by the fact that there are no naturally occurring resources
currently within easy distance of the city. The once rich mine on
Magnetic Mountain is now depleted and there never actually existed
any coal for coking the iron on the site. Now all of the raw
materials must be hauled in over the rails from various locations
all over Russia. It may seem odd that a country with slightly more
than half of the population of the United States would produce just
as much steel and pig iron. This discrepancy is due to several
factors. During the crash industrialization of the Stalin Era a
tremendous emphasis was placed on quantity of goods, tonnage of
steel was in demand, rather than quality of steel. This push was an
attempt to get the USSR cought up to the United States in industrial
capacity. This push therefore required tremendous amounts of
measurable goods, tonnage of steel for example, and in the command
economy, what the government dictates is what the factories attempt
to produce. A second factor was due in large part to the faulty
infrastructure in the Soviet Union. Since manufacturers knew that
their shipments of raw steel would not arrive on time, they ordered
far more than they needed and ordered it far more frequently and
kept tremendous inventories of steel on hand which, because of the
large amount of time spent in poor storage conditions, would rust
away and become useless. Thus, the cycle started over again.

Condidtions in the factory have always been far from pleasant.
At certain points during the construction of the factory injuries
and deaths averaged over one per day. Conditions improved as time
went on, but they are still not up to snuff with Japanese or
American steel production standards. Injuries are still more common
than in the US and conditions are worse. A major factor in the
increased hazard level in the Magnitogorsk Steel Works is the
condition of the equipment and facilities. The majority of
equipment in the factory still relies on technology developed in the
1930s when the plant was built and in many places the machines
themselves are the same ones installed in the origional factory at
its inception. The age of the machinery coupled with overuse and
poor maintanence habits has resulted in the condition of the factory
today. Many of the machines have been continuously run over
capacity and not given time for repair so that the factory would
meet its quota. The practice of "storming" also took its toll ont
he machinery and workers. Storming is a practice instituted under
the planned economy the end of a production cycle. If the plant
had not yet reached it's quota of steel produced, then the plant
would shift into overdrive and produce the remaining portion of the
quota. This often doubled or tripled the plant's normal output.
This degradation of machinery, coupled with its age and inefficiency
have combined for a truly difficult working environment. Workers in
the factory have been reported to prefer the summer months to the
winter because in the summer the factory allows its roof and
skylight system to open which reduces the concentration of fumes.

These poor working conditions along with the age and quality of
machinery combine to reduce the efficiency of the plant
significantly. Today the plant has a staff of 55,000 workers and
produces only 30% of the steel it did only a decade ago. As matters
stand now, the plant is extremely inefficient compared to plants in
Japan and the United States. Workers in the Lenin Steelworks in
Magnitogorsk produce an average of 183 tons of steel per year, while
the Gary Works in Gary, Indiana produces an average of 1800 tons of
steel per worker per year.

The Current state of the steel mill is rather up in the air.
While the mill is chugging along at less than a third of its regular
capacity, it is still one of the more viable Russia industries.
Asian countries without their own steel manufacturing complexes have
been relatively eager to buy the cheap steel from this Russian
plant. Foreign sales have resulted in an income of hard currency
for the plant workers, each of whom is paid more than the national
average. In addition, American, Asian and European investors have
all been interested in refurbishing the plant with modern equipment
and pollution reduction devices in hopes of revitializing the
plant. So far their efforts have come with moderate success, which
often spurs more investment. This said however, the plant still
suffers from periodic shutdowns due to lack of materials and
equipment breakdown."

Like some of the other one time black market traders, Alexander
P. Smolensky also prepared himself during the Soviet era for what
ultimately was to become a market economy. Some might say he overprepared himself.

Born in 1954, Mr. Smolensky moonlighted on a second job in a
bakery for which he lacked a permit and then he helped typeset and
publish a Bible using government presses and ink to do so. For this
he was arrested by the KGB in 1981 and charged with economic crimes.
Today such initiatives would be applauded. Then he was sentenced to
two years at hard labor although he only served one day.

A born risk-taker, he responded to Gorbachev's [Михаил
Сергеевич Горбачёв] 1987 decree
allowing the formation of cooperatives and private businesses by
founding the Moscow No. 3 construction cooperative which quickly
became an vital source of supplies to Moscow tradesmen.

He made money so fast it became a problem, so, rather than trust
state banks which were not accustomed to dealing with large private
accounts he decided to create his own bank, the Stolichny Bank [Столичный
банк]. It
has grown into one of Russia's largest, now known as SBS-AGRO [СБС-АГРО].

Unlike many of his fellow bankers Mr. Smolinsky has not actively
sought to build up a large industrial empire. While his bank does
control the newspaper Kommersant [Коммерса́нтъ] and Novaya Gazeta [НОВАЯ ГАЗЕТА] and he shares in
the ownership of the Sibneft [Сибнефть] oil company and the television network
ORT [ОРТ - Общественное Российское Телевидение] with Boris Berezovsky
[Борис Абрамович Березо́вский], for the most part he has focused instead
on developing a large network of bank branches.

Twenty-three-year-old Russian oligarch Nikolai Smolensky [Николай
Смоленский] is
the new owner of the British sports car company TVR. Nikolai Smolensky is the
son of the Russian banker Alexander Smolensky [Александр Смоленский].

UK-Bezug

Abb.: TVR 280i
[Bildquelle: Wikipedia]

The Blackpool-based company is one of the few private-owned
car companies left in Great Britain. The company employs 400 people. According
to media reports, the new owner promised the company would continue developing.

Former TVR owner Peter Wheeler and the new proprietor do not
unveil the details of the transaction. According to the Financial Times,
the British sports car maker's income in 2002 made up over $700 thousand. Peter
Wheeler said he was very sorry to part with his company, although he added it
was time to pass the business to the young generation.

The plans to produce Sagaris and Tuscan 2 models remain unchanged. First demo
cars will appear in the dealers' network during the coming months.

Observers say, the new ownership of the British company may produce a
sensation comparable to Roman Abramovich's acquiring of Chelsea.

Alexander Smolenski, the father of the new company owner,
set up a savings bank in the middle of the 1990s. The businessman bought
Agroprombank [Агропромбанк] and established the largest network of banks in Russia with more
than a million of private depositors - SBS-Agro [СБС-Агро]. The bank went bankrupt after
the financial crisis in Russia in 1998; it was abolished in 2003. Debts to
private depositors were partially cleared, although the bank still owed about
$1.2 billion to foreign clients.

Abb.: Kreditkarte von 1 O.B.K.

In 2003 Alexander Smolensky established a new network
called The First Community of Mutual Credit [Банк Первое
Общество Взаимного Кредита], known in Russia as 1O.V.K. [1 О.В.К.] A part
of new companies was housed in the offices of SBS-Agro. Alexander Smolensky's
son Nikolai headed the board of directors of the new financial organization. In
2004 the banker sold his empire to Interros Group [Интеррос], which currently plans a
merger between O.V.K. and Rosbank [Росбанк].

Abb.: Reklame für Visa-beebonus Rosbank

In February of 2004 Nikolai Smolensky was
recognized Russia's youngest billionaire.

TVR is a small British car maker, which manufactures up to
2,000 cars a year. TVR ranks third among the world's sports cars makers. The
range of company"s models includes Tuscan S, T350, T400R, T440R, Cerbera, Tamora,
Sagalis. All cars are custom-made."

In 1990, appointed Deputy Mayor, then the
First Deputy Mayor of Leningrad and Chief Economic Adviser to
the City Mayor.

In November 1991, became Chairman of the
State Property Committee of the Russian Federation, member of
the Cabinet

In June 1992, appointed Vice-Premier of the
Russian Government.

In June 1993, took part in establishing the
liberal Vybor Rossii [Выбор России] (Choice of Russia) electoral block. Elected
to the State Duma in 1993.

From November 1994 — January 1996, he was
First Vice-Premier in charge of economy and finance

In July 1996, was appointed Chief of the
Presidential Administration.

In March 1997, appointed First Vice-Premier
and Minister of Finance.

In April 1997, appointed Director of the
Russian Federation to the International Bank of Reconstruction
and Development (IBRD).

In 1998, appointed Chairman of the Board of
the Unified Energy System of Russia [РАО "ЕЭС России"]

Married, has two children

Probably the most unpopular of all the Russian
politicians, Anatoly Chubais is the head of the Unified Energy
System of Russia and the mastermind behind the Russian privatization
in early 1990s.

Anatoly Chubais graduated in 1977 from the Leningrad Institute of
Economics and Engineering with a Ph.D. in economics. He was an
assistant lecturer from 1977 to 1982 and an assistant professor from
1982 to 1990 at his alma mater.

From 1984-1987 Chubais was the leader of an informal ’circle of
young economists,’ set up by graduates of the Leningrad economic
institutes. In 1987, he took an active part in founding the
Perestroika [Перестройка] (Restructuring) Club in Leningrad, which was aimed at
promoting liberal ideas among intellectuals.

In 1990, Anatoly Chubais began his political career as a deputy
chairman of the Leningrad City Executive Committee, and in 1991
became chief economic adviser to the mayor of St. Petersburg,
Anatoly Sobchak [Анатолий
Александрович Собчак]. Chubais was part of a group of young economists who
pushed for rapid economic reform toward a market-based system. A
strong advocate of the privatization of state property, he was
appointed deputy prime minister for the Ministry of Privatization in
1992, becoming a first deputy prime minister in 1994. As a member of
the State Duma from 1994 to 1996, he served on the Committee for
Property, Privatization, and Economics.

In February 1996, he set up the Civil Society Fund, which formed the
foundation for Boris Yeltsin’s [Борис Николаевич Ельцин] re-election headquarters’ research
group. Guided by Chubais, the group played a key role in organizing
the public support campaign in favor of reelecting Yeltsin as
President of Russia.

In March 1997, Anatoly Chubais was appointed first deputy prime
minister of Russia and served in this position until March 1998.

After his abrupt dismissal, along with the rest of the Russian
Government in March 1998, Anatoly Chubais was first elected to the
Board of Directors of the joint-stock company Unified Energy System
of Russia and then appointed Chairman of the Board on April 30,
1998.

Along with being one of the top managers in Russian business,
Anatoly Chubais continues his political career. In 2001 he was
elected Co-chairman of the SPS [Союз Правых Сил—
СПС] (Union of Right Forces) political
party and served as such until the aftermath of the parliamentary
elections of 2003, when all of the party’s leaders resigned from
their positions.

Abb.: ®Logo der SPS-Partei

Anatoly Chubais is perhaps the most unpopular of the Russian
politicians because his name is associated in the minds of ordinary
citizens with the voucher privatization that took place from
October 1992 until July 1994. In the process of privatization, every
Russian citizen received a voucher that was nominally worth 10,000
rubles (which was an equivalent of $5,000 by the black market rate).
10,000 rubles was a sum that was calculated to be an average share
of the country’s wealth per capita.

Officially the vouchers could be exchanged for shares in the newly
privatized enterprises, but in reality only one tenth of all
vouchers went through this kind of an exchange, because enterprises
chose to sell shares to those close to the management. Most of the
vouchers were invested by the people into voucher funds, which
sprang up like mushrooms after the rain. The funds promised its
shareholders that they would invest the vouchers and offered a
promise of a handsome return. In reality, the owners of the vouchers
were left with nothing but pieces of paper.

In the minds of the ordinary people the voucher privatization
failed, and the person responsible for the whole process was Anatoly
Chubais, who became something of an enemy of the people. His future
work in the government did not help his reputation, as the series of
reforms initiated by Chubais and a team of “young reformers” proved
to be highly unpopular measures.

Within the space of one decade, Nikolai Tsvetkov [Николай Цветков] has risen from Air Force
lieutenant colonel to billionaire. This year the Afghan [افغانستان] war veteran has made
it onto the Forbes list

Recently, yet another individual joined the ranks of Russian
oligarchs. Meet Nikolai Tsvetkov, 43, the president of Nikoil [НИКойл], a
finance and investment corporation. First, in a sensational
twist in his business career, he made it onto the Forbes list of
the worlds richest people: The newcomers net worth was estimated
at $1.3 billion. Then, as if to confirm this estimate, he
disclosed Nikoils shareholder structure. This was followed by
reports of Tsvetkovs royal present to his wife: Galina Tsvetkova
got a 75% stake in the Lomonosov porcelain factory [Императорский
(Ломоносовский) фарфоровый завод].

Abb.: Lomonossow-Porzelan

Cinderella, Prince Charming & Co.

"Mr. Tsvetkov does not give interviews. He has a heavy
schedule," Nikoils press service said in response to my attempts
to get first-hand information. Unlike other oligarchs, Tsvetkov
appears to be publicity-shy. His military background is another
thing that makes him stand out in this milieu.

Tsvetkov graduated from the Zhukovsky Air Force Engineering
Academy with top honors. He served in Tambov, Moscow, and
Russias Far East. He fought in Afghanistan. By the early 1990s,
Tsvetkov had attained the rank of lieutenant colonel and a
near-penury status. He retired and got a job on the stock
exchange. Before long he realized that he lacked specialist
training. So he did a course in business management at the
Plekhanov Academy of National Economy.

Tsvetkovs life story recalls that of Cinderella: Both worked
hard and then met their Prince Charming. Tsvetkov was certainly
lucky with the prince. Vagit Alekperov [Вагит Юсуфович Алекперов], the incumbent president
of Lukoil, was highly instrumental in propelling the retired
lieutenant colonel into business.

They met in 1992. At the time, Tsvetkov was working at
Brokinvest, a small brokerage company he had established, while
Lukoil was looking for business partners. A lucky chance?
Perhaps. But Tsvetkov should be given his due, too: They say the
retired lieutenant colonel has always been a can-do man. Thus
his obscure company became an investment and financial adviser
to Lukoil, then still a state-controlled concern.

Alekperov and Tsvetkov have been together ever since. A year
after their first meeting, they founded Nikoil, an investment
vehicle - a first on the domestic stock market. Tsvetkov placed
his bet on oil, landing a trump and hitting the big time. The
oil market was up for grabs, and Nikoil got closely involved in
the process, buying up oil company vouchers, or investment
checks, for Lukoil, taking part in the privatization of oil
enterprises, and rendering them financial services.

In return, Lukoil transferred to Nikoil for trustee
administration its check-investment fund - in fact, a financial
pyramid scheme. As everybody knows, those pyramid schemes
collapsed overnight, wiping out peoples savings. But the Nikoil
owner found a way out by reorganizing his check investment fund
(ChIF) into a unit investment fund (PIF). As a result,
shareholders were able to swap their shares for money while
Tsvetkov avoided legal unpleasantness. By revealing recently his
firms shareholder makeup Tsvetkov only confirmed what the
business community have known all along: Alekperov is Nikoils
co-owner.

Private Life

Very little is known about Tsvetkovs private life. Only a few
years ago, Nikoils president beamed from glossy magazine covers,
making small revelations, but today his life is absolutely off
limits to the public. It is known that Tsvetkov has a family - a
loving wife and two daughters. The younger is still at school
while the elder is in her final year at the Plekhanov Academy.

Galina Tsvetkova once admitted that since Nikolai Tsvetkov
became the head of a successful business corporation very little
had changed in her own life. The couple have been together for
20 years. They say it was Nikolais military tours of duty that
cemented the Tsvetkovs union. It is not ruled out that Galina in
fact was the one who prompted the retired lieutenant colonel to
go into business: As head of a post office, she made more than
her husband did. Rumor has it that he could not put up with the
fact. When Nikoil needed start-up capital, a modest dacha [дача] that
Galina had inherited from her parents was contributed to the
incorporation capital. True, later on the house was withdrawn.

At present, Galina Tsvetkova heads Nikoils corporate family
club: Her duties include organizing parties for corporate staff.
Judging by Nikolai Tsvetkovs official comments, family values
hold pride of place in Nikoil. The president makes a point of
spending at least one day-off a week with his family. But it is
"business performance" that he puts first, without any provisos.

This must be why, in line with the current trend toward business
"purity," about a year ago Nikoil wanted to hire Father Ioann,
better known under his lay name of Ivan Okhlobystin [Иван Охлобыстин], author and
former movie personality, as the companys full-time
psychologist. Unfortunately, it did not work out in the end.
According to Father Ioann, he inadvertently mentioned his
upcoming appointment with Nikoil in a newspaper interview,
whereupon company management gave him to understand that his
employment was a non-starter. "We had discussed my work schedule
and program in detail," Father Joann complained. "I was quite
happy with the compensation package, too: I have five children
to support, and I hate to accept money from the church as it has
to find its feet yet. I am disenchanted with businessmen."

Judging by this story, Tsvetkov puts corporate image above
all else.

Buying Up Everything that Moves

Today Nikoil is a real financial octopus, and omnivorous at
that. Whereas before 1997 it fed exclusively on oil, now the
corporation, by its own admission, is in a leading position on
the credit market, controlling over 30% of unit investment funds
(about 80,000 inves-tors), 10% of the voluntary insurance
market, and 7.5% of the precious metals market.

The octopuss head is the IBG Nikoil joint-stock bank, which
is among Russias top 20 banks. Tsvetkov himself, judging by the
National Managers Association ratings, is among the top 10
financial market managers in Russia. Experts attribute Nikoils
success to, among other things, the corporations structure - a
horizontal model wherein powers and responsibilities are
delegated to its subdivisions. Incidentally, only two companies
in Russia follow this model - Nikoil and the no less successful
MDM group.

According to Andrei Kolyagin, executive director of the Guild
of Investment and Finance Analysts, it is also important that
right from the outset the corporation has been in the charge of
just one person, which minimized the risks involved in changing
top executives.

Military Bearing

Although he has become part of the business elite, Tsvetkov
never forgets about his military background: His corporation
employs a large number of ex-servicemen, in particular those who
fought in Afghanistan. One of Nikoils subdivisions is especially
"militarized" - the Law Enforcement Insurance Company, most of
whose top executives are former law enforcement officers.

Tsvetkovs tactics are quite aggressive - well in line with
his military past. Today he is actively promoting an idea that
is new to Russia - that of a financial supermarket for the rich,
a one-stop center for banking, insurance, and investment
services. To this end, Nikoil took over Avtobank [автобанк] (a leader in
the number of private depositors in Russia) and the
Promyshlenno-strakhovaya kompaniya industrial-insurance company.
Furthermore, recently it took control of UralSib [УРАЛСИБ], a major
regional bank. According to some sources, this latest
acquisition came as part of an arcane tradeoff ahead of
presidential elections in Bashkiria [Республика
Башкортостан]: In return for his assured
victory, Murtaza Rakhimov [Мортаҙа Ғөбәйдулла улы Рәхимов], the incumbent head of the republic,
promised Moscow a number of key regional assets, including
UralSib, his pocket bank. In addition, Nikoil signed with the
Bashkortostan government an agreement whereby, for the next five
years, the corporation will be defining investment priorities in
the region. The UralSib case is further evidence of the fact
that Tsvetkov enjoys the trust of the federal authorities.

Nikoil also has a hand in the Novorossiysk [Новороссийск]merchant marine
port: Tsvetkov is chairman of the ports board of directors while
his company holds a 30 percent stake in the port. Today, the
port of Novorossiysk handles one-third of Russias entire oil and
grain export, the port itself being of strategic importance. A
well informed source in labor union circles described Tsvetkov
as "master of the Black Sea," pointing out that as Nikoil
strengthened its positions, the leadership of the ports labor
union was replaced with someone more amenable and cooperative
while the board of directors started meeting not in Novorossiysk
but in Moscow, which made the presence of union representatives
there all but impossible.

Tsvetkov is actively taking on everything that moves - both
at sea and on land. Recently, the federal government authorized
his corporation (along with the Troika-Dialog company) to look
for investors for reforming the railway monopoly. The Railways
Ministry hopes that Tsvetkov and company will attract at least
$1 billion in investment capital. One of Tsvetkovs latest
acquisitions is a 50 percent stake in the Kopeika economy-class
trading house that retails goods at wholesale prices, and an
almost one-third of stock in OAO Ais-Fili [Айс-Фили], a major ice-cream
producer. The buying of the Lomonosov porcelain factory [Императорский
(Ломоносовский) фарфоровый завод] for his
wife is also a long-term investment in the Tsvetkov empire: The
factory with a 250-year history is today a highly profitable
enterprise. They say that the factory management was a bit
nervous of the new "mistress." Rumor has it, however, that with
Galina Tsvetkovas advent, the factory has once again become an
official china purveyor for the Kremlin.

By expanding his empire and acquiring more and more new
assets, the former lieutenant colonel was simply destined to
emerge from the shadows into the public light. Even so, it is
unlikely that Nikolai Tsvetkov, who has until recently shunned
publicity, rejoices over his inclusion on the Forbes list of
billionaires. Modern history shows that ending up on this list
is a mixed blessing for a Russian billionaire, one possible
outcome being banishment or even prison. It is unlikely that
Nikolai Tsvetkov relishes such a dramatic turn in his career."